UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

———————

FORM 10-Q

———————

ü	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	ACT OF 1934
For the quarterly period ended: January 31, 2010
For the quarterly period ended: July 31, 2009
Or
	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	ACT OF 1934
For the transition period from: _____________ to _____________

EVOLUTION RESOURCES, INC. (Exact name of registrant as specified in its charter)

(Exact name of registrant as specified in its charter)

Nevada		333-140306		20-2356853
(State or other jurisdiction of incorporation or organization)		Commission file number)		(IRS Employer Identification No.)

Nevada	333- 140306	20-2356853
(State or other jurisdiction of incorporation or organization)	Commission file number)	(IRS Employer Identification No.)

143 Yazoo Avenue

43 Yazoo Avenue

Clarksdale, Mississippi 38614

(Address of principal executive offices)

662-655-1077

(Registrant's telephone number)

(Former name and address, if changed since last report)

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

Large Accelerated Filer o Accelerated Filer o Non-Accelerated ~~Filero~~ Filer o Smaller Reporting Company þ

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes ¨ No þ

~~Yes~~State ~~¨ No~~the number þof shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 17,156,077 shares of Common Stock, as of April 20, 2010.

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 17,081,077 shares of Common Stock, as of September 19, 2009.

INDEX

		Page No.(s)
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheet as of July 31, 2009 (Unaudited)	1
	Consolidated Statements of Operations For the Three Months Ended July 31, 2009 and For the Period from April 9, 2009 (Inception) through July 31, 2009 (Unaudited)	2
	Consolidated Statements of Cash Flows For the Three Months Ended July 31, 2009 and for the Period from April 9, 2009 (Inception) through July 31, 2009 (Unaudited)	3
	Notes to the Consolidated Financial Statements (Unaudited)	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17
Item 4T.	Controls and Procedures
		18
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19
Item 3.	Defaults Upon Senior Securities	20
Item 4.	Submission of Matters to a Vote of Security Holders	20
Item 5.	Other Information	20
Item 6.	Exhibits	20
SIGNATURES		21

PART I - FINANCIAL INFORMATION

ITEM 1

		Page No.(s)
Item 1.	Financial Statements

	Consolidated Balance Sheets as of January 31, 2010 (Unaudited) and October 31, 2009	1

	Consolidated Statements of Operations For the Three Months Ended January 31, 2010 and For the Period from April 9, 2009 (Inception) through January 31, 2010 (Unaudited)	2

	Consolidated Statement of Stockholders’ Equity For the Period from April 9, 2009 (Inception) through January 31, 2010 (Unaudited)	3

	Consolidated Statements of Cash Flows For the Three Months Ended January 31, 2010 and For the Period from April 9, 2009 (Inception) through January 31, 2010 (Unaudited)	4

	Notes to the Consolidated Financial Statements (Unaudited)	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22

Item 4.	Controls and Procedures
		22
PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	22

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23

Item 3.	Defaults Upon Senior Securities	23

Item 4.	Submission of Matters to a Vote of Security Holders	23

Item 5.	Other Information	23

Item 6.	Exhibits	23

SIGNATURES		24

~~FINANCIAL~~PART I ~~STATEMENTS~~- FINANCIAL INFORMATION

~~NOTE:~~ITEM ~~These~~1 ~~consolidated~~- financial statements reflect the Company’s Consolidated Balance Sheet at July 31, 2009 (unaudited), the unaudited Consolidated Statements of Operations for the three months ended July 31, 2009 and, for the period from inception April 9, 2009 through July 31, 2009, and unaudited Consolidated Statements of Cash, for the period from inception April 9, 2009 through July 31, 2009.FINANCIAL STATEMENTS

EVOLUTION RESOURCES, INC.

~~Consolidated~~(A Development ~~Balance~~Stage ~~Sheet~~Company)

~~July~~ ~~31,~~Consolidated Balance ~~2009~~Sheets

(Unaudited)

	January 31, 2010		October 31, 2009
		(Unaudited)
ASSETS
Current assets:
Cash	$	4,913	$	2,221
Prepaid expenses		35,917		56,781
Other receivables		43,417		-
Capitalized issuance expense		15,584		57,667
Total current assets		99,831		116,669

Property and equipment, net of accumulated depreciation		10,445,970		10,538,970
Equipment, net held for sale		3,090,000		5,150,000
License agreement		-		1,500,000
Total assets	$	13,635,801	$	17,305,639

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	1,241,167	$	865,067
Related party payables		624,626		214,085
Accrued interest payable		317,648		282,502
Common stock in dispute (500,000 shares held by Company)		2,000,000		-
Current portion of deferred liability		-		60,000
Total current liabilities		4,183,441		1,421,654

Deferred liability, net of current portion		-		1,440,000
Notes payable, net of discount		1,374,000		1,320,250
Derivative liability		4,827,503		4,392,823
Deferred income tax liability		1,792,934		1,792,934
Total liabilities		12,177,878		10,367,661

Stockholders’ equity:
Convertible preferred stock, Series A, at $0.001 par value; 1,000,000 authorized, liquidation preference of $100 per share; 22,500 shares authorized; 22,500 shares issued and outstanding		90,467		53,973
Common stock, $0.001 par value, 74,000,000 shares authorized, 17,581,077 shares issued and 17,156,077 and 17,581,077 outstanding at January 31, 2010 and October 31, 2009, respectively		17,156		17,581
Additional paid-in capital		3,636,969		3,386,023
Earnings (deficit) accumulated during the development stage		(2,286,669)		3,480,401
Total stockholders’ equity		1,457,923		6,937,978
Total liabilities and stockholders’ equity	$	13,635,801	$	17,305,639

ASSETS
CURRENT ASSETS:
Prepaid consulting expenses and license	$	50,000
Total current assets		50,000
Prepaid financing		91,000
Fixed assets, net		5,486,219
Notes receivable		180,000
Goodwill		46,615
TOTAL ASSETS	$	5,853,834
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	1,134,995
Accrued interest receivable		253,090
Notes payable		1,159,000
Total Current Liabilities		2,547,085
Derivative liability		11,779,198
Total Liabilities		14,326,283
STOCKHOLDERS’ DEFICIT:
Convertible preferred stock, Series A, at $0.001 par value; liquidation preference of $100 per share; 22,500 shares authorized; 12,000 shares issued and outstanding		32,479
Common stock at $0.001 par value; 74,000,000 shares authorized; 17,081,077 shares issued and outstanding		17,081
Additional paid-in capital		(16,750	)
Deficit accumulated during the development stage		(8,505,259	)
Total Stockholders’ Deficit		(8,472,449	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	5,853,834

See accompanying notes to the consolidated financial statements.

EVOLUTION RESOURCES, INC.

(A Development Stage Company)

Consolidated Statements of Operations

For the Three Months Ended July 31, 2009 and

For the Period from April 9, 2009 (Inception) through July 31, 2009

(Unaudited)

	Three Months Ended July 31, 2009			For the period from Inception April 9, 2009 through July 31, 2009
	Three months ended January 31, 2010				For the period from April 9, 2009 (Inception) through January 31, 2010
Revenue	$	––		$	––
Revenue:	$	-			$	-
Cost of revenue		––			––
Operating expenses:
Gross profit		—			––
Professional fees		391,024				728,778
Professional fees		125,941			125,941
Compensation expense		2,250,521				2,250,521
General and administrative		266,050			266,050
Management services		125,000				215,987
Loss from operations		(391,991	)		(391,991	)
Depreciation and amortization		146,750				401,000
Other income (expense):
General and administrative		274,723				485,351
Loss on derivative liability		(8,113,268	)		(8,113,268	)
Total operating expenses		3,188,018				4,081,637
Total other income (expense)		(8,505,259	)		(8,505,259	)
Loss from operations		(3,188,018	)			(4,081,637	)
Loss before income taxes		(8,505,259	)		(8,505,259	)
Other expense (income):
Income taxes		––			––
Interest expense		47,878				92,900
Net loss	$	(8,505,259	)	$	(8,505,259	)
Loss on derivative liability		471,174				4,622,834
Net loss per common share- basic and diluted	$	(0.50)		$	(0.50	)
Other income		-				(16,779	)
Weighted average number of common shares outstanding – basic and diluted		17,081,077			17,081,077
Impairment on equipment held for sale		2,060,000				2,060,000
Total other expense (income)		2,579,052				6,758,955
Loss before income taxes and extraordinary gain		(5,760,760	)			(10,840,592	)
Income tax provision		-				(1,792,934	)
Loss before extraordinary gain		(5,767,070	)			(12,633,526	)
Extraordinary gain on acquisition		-				10,346,857
Net loss	$	(5,767,070	)		$	(2,286,669	)
Net loss per common share – basic and diluted	$	(0.33	)		$	(073	)
Net income per common share from extraordinary gain on acquisition – basic & diluted		-				0.60
Net loss per common share	$	(0.33	)		$	(0.13	)
Weighted average number of common shares outstanding - basic and diluted		17,647,110				17,237,643

See accompanying notes to the consolidated financial statements.

EVOLUTION RESOURCES, INC.

(A Development Stage Company)

Consolidated Statement of ~~Cash~~Stockholders’ ~~Flows~~Equity

For the Period ~~Three~~from ~~Months~~April ~~Ended July 31~~9, 2009 ~~and~~(Inception) through January 31, 2010

For the Period from April 9, 2009 (Inception) through July 31, 2009

(Unaudited)

	For the three months ended July 31, 2009			For the period From April 9, 2009 through July 31, 2009
	Preferred Stock (Shares)				Preferred Stock ($)		Discount on Preferred Stock ($)			Common Stock (Shares)			Common Stock ($)			Additional Paid-in Capital ($)			(Deficit) Income Accumulated During the Development Stage ($)			Total Stockholders’ Equity ($)
CASH FLOWS FROM OPERATING ACTIVITIES:
Balance at April 9, 2009 (Inception)		-			$	-	$	-			9,760,000		$	9,760		$	49,995		$	(83,218	)	$	(23,463	)
Net loss	$	(8,5058259	)	$	(8,505,259	)
Reverse Acquisition											7,321,077			7,321			(66,745	)		83,218			23,794
Adjustments to reconcile net loss to net cash provided by operating activities:
Sale of 12,000 preferred shares		12,000				120,000		(120,000	)														-
Derivative liability		7,999,888			7,999,888
Sale of 5,000 preferred shares		5,000				50,000		(50,000	)														-
Changes in operating assets and liabilities
Sale of 5,500 preferred shares		5,500				55,000		(55,000	)														-
Prepaid expenses		(50,000	)		(50,000	)
Shares issued for cancelled warrants											500,000			500			3,402,773						3,403,273
Accrued expenses		487,748			487,748
Amortization of discount on preferred shares								53,973															53,973
Other		10,933			10,933
Net income																				3,480,401			3,480,401
Net Cash Provided by Operating Activities		56,690			56,690
Balance at October 31, 2009		22,500				225,000		(171,027	)		17,581,077			17,581			3,386,023			3,480,401			6,937,978
CASH FLOWS FROM INVESTING ACTIVITIES:
Shares in dispute, held by Company,											(500,000	)		(500	)		(1,999,500	)					(2,000,000	)
Cash acquired from reverse acquisition		1,831			1,831
Shares issued for services																	2,250,446						2,250,446
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of shares to Harborview											75,000			75									75
Sale of Series A convertible preferred stock , net of cost of $35,000		32,479			32,479
Amortization of discount on preferred shares								36,494															36,494
Cash paid for debt issuance costs		(91,000	)		(91,000	)
Net loss																				(5,767,070	)		(5,767,070	)
Net Cash Provided By Financing Activities		58,521			58,521
Balance at January 31, 2010		22,500			$	225,000	$	(134,533	)		17,156, 077		$	17,156		$	3,636,969		$	(2,286,669	)	$	1,457,923
NET INCREASE IN CASH		—			––
CASH AT BEGINNING OF PERIOD		—			––
CASH AT END OF PERIOD	$	—		$	––
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
Interest paid	$	—		$	—
Income taxes paid	$	—		$	––

See accompanying notes to the consolidated financial statements.

EVOLUTION RESOURCES, INC.

(A Development Stage Company)

Unaudited Consolidated Statement of Cash Flows

(Unaudited)

	Three months ended January 31, 2010			For the period from April 9, 2009 (Inception) through January 31, 2010

Cash flows from operating activities:
Net loss	$	(5,767,070	)	$	(2,286,669	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Gain on acquisition, net of cash acquired		-			(10,284,842	)
Discount on note payable		-			(215,000	)
Impairment on equipment held for sale		2,060,000			2,060,000
Stock compensation expense		2,250,521			2,250,521
Loss on derivative liability		471,174			4,700,906
Depreciation and amortization		146,750			401,000
Discount on preferred stock		(36,494	)		(207,521	)
Other		71,640			95,434
Changes in operating assets and liabilities:
Prepaid expenses		20,864			(35,917	)
Related party accounts receivable		(43,417	)		(43,417	)
Licensing agreement		-			(1,500,000	)
Capitalized issuance expense		42,083			(15,584	)
Accounts payable and accrued expenses		376,100			790,457
Related party accounts payable		410,541			624,626
Deferred liability		-			1,500,000
Income taxes payable		-			1,792,934
Net cash provided by (used in) operating activities		2,692			(373,072	)

Cash flows from investing activities:
Cash paid for acquisition of Liquafaction		-			(62,015	)
Net cash used in investing activities		-			(62,015	)

Cash flows from financing activities:
Sale of Series A convertible preferred stock		-			225,000
Cash from note payable		-			215,000
Net cash provided by financing activities		-			440,000


Net decrease in cash and cash equivalents		2,692			4,913
Cash and cash equivalents, beginning of year		2,221			-
Cash and cash equivalents, end of year	$	4,913		$	4,913

Supplemental disclosures:
Cash paid during the period for interest	$	18,811		$	-
Cash paid during the period for income taxes	$	-		$	-

See accompanying notes to the consolidated financial statements.

EVOLUTION RESOURCES, INC.

(A Development Stage Company)

~~July~~ January 31, ~~2009~~2010

Notes to the Consolidated Financial Statements

(Unaudited)

NOTE 1 –ORGANIZATION

Evolution Resources, Inc. (“Evolution” or the “Company”), formerly BBN Global Consulting, Inc. (“BBN”). BBN was incorporated on March 15, 2005 under the laws of the State of Nevada. It was formed to be a consulting firm with a mission of providing strategic business planning and management consulting to small domestic companies and to assist medium sized companies in China and Brazil to establish a business presence in the United States. Since November 1, 2007 the Company has ceased operations, and all previous business activities have been discontinued. After the closing of the merger on May 27, 2009, as described below, BBN changed its name from BBN Global Consulting, Inc. to Evolution Resources, Inc. to reflect the activities or our principal business. Because of the merger, BBN ceased to be a “shell company” as that term is defined in Rule 405 of the Securities Act and Rule 12b-2 of the Exchange Act.

On May 27, 2009 (the “Merger Date”), BBN, Evolution and Evolution Resources Acquisition Corporation (“ERAC”), a wholly-owned subsidiary of Evolution entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, on May 27, 2009 ERAC merged with and into Evolution, with Evolution remaining as the surviving corporation (the “Merger”).

As a result of the ownership interests of the former shareholders of Evolution, for financial statement reporting purposes, the merger between BBN and Evolution has been treated as a reverse acquisition with Evolution deemed the accounting acquirer and BBN deemed the accounting acquiree under the purchase method of accounting in accordance with Statement of Financial Accounting Standards No. 141 “Business Combinations” (revised 2007) (“SFAS No. 141R”). The reverse merger is deemed a capital transaction and the net assets of Evolution (the accounting acquirer) are carried forward to BBN (the legal acquirer and the reporting entity) at their carrying value before the combination. The acquisition process utilizes the capital structure of BBN and the assets and liabilities of Evolution which are recorded at historical cost. The equity of BBN is the historical equity of Evolution retroactively restated to reflect the number of shares issued by BBN in the transaction.

On May 27, 2009, in connection with the Merger, the Company amended its articles of incorporation to change its name from BBN Global Consulting, Inc. to Evolution Resources, Inc. (the “Company”).

As of the closing of the Merger, each issued and outstanding share of common stock of Evolution was converted into the right to receive 15,296,077 shares of the common stock of BBN. Following (i) the closing of the Merger and (ii) the cancellation of 7,975,000 shares of BBN’s common stock in connection with the Merger, the former shareholders of Evolution hold approximately 89.55% of the common stock of BBN.

On December 31, 2009, the Company formed a wholly owned subsidiary, Evolution Development LLC, which will hold intellectual property and manage the Company's research and development efforts.

Evolution Resources, Inc. is a development stage company focused on the advancement of the production of cellulosic ethanol and biodiesel. Evolution’s business plan contains certain proposed projects that if successfully implemented and completed, will leverage existing assets and infrastructure to (a) significantly shorten the time frame required to establish commercial scale cellulosic ethanol production facilities and (b) “repurpose” certain industrial facilities to provide key biofuels production components.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying unaudited interim consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 108 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended October 31, 2009 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC on April 20, 2010.

~~EVOLUTION~~The consolidated ~~RESOURCES~~financial statements include the accounts of the Company at January 31, ~~INC~~2010 and October 31, 2009 (where applicable). All inter-company balances and transactions have been eliminated.

(A Development Stage Company)

~~July~~The Company ~~31,~~is ~~2009~~a development stage company as defined by ASC 915-10 “Development Stage Entities”. The Company is still devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced. All losses accumulated since inception has been considered as part of the Company's development stage activities.

Notes to the Consolidated Financial Statements (Continued)

The consolidated financial statements include the accounts of the Company at July 31, 2009 and for the period from April 9, 2009 (Inception) through July 31, 2009. All inter-company balances and transactions have been eliminated.

Development stage company

The Company is a development stage company as defined by Statement of Financial Accounting Standards No. 7 “Accounting and Reporting by Development Stage Enterprises” (“SFAS No. 7”). The Company is still devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced. All losses accumulated since inception have been considered as part of the Company's development stage activities.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fiscal year end

The Company elected October 31, as its fiscal year ending date.

Cash equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Licenses

The Company has adopted the guidelines as set out in Statement of Financial Accounting Standards No. 142 “Goodwill and Other Intangible Assets” (“SFAS No. 142”) for the license. Under the requirements as set out in SFAS No. 142, licenses are stated at cost and amortized over their remaining legal lives, estimated useful lives or the term of the contracts, whichever is shorter. Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts.

Property, Plant and Equipment

Property, plant and equipment are carried at cost. Depreciation of property, plant and equipment is provided using the straight line method at rates based on the estimated useful lives. The cost of asset additions and improvements that extend the useful lives of property and equipment are capitalized. Routine maintenance and repairs items are charged to current operations. The original cost and accumulated depreciation of asset dispositions are removed from the accounts and any gain or loss is reflected in the statement of operations in the period of disposition.

~~Goodwill~~Licenses

~~Goodwill~~The Company ~~represents~~has ~~the~~adopted ~~excess of~~ the ~~cost~~guidelines ofas anset ~~acquired~~out ~~entity~~in ~~over~~ASC ~~the~~350-10 ~~fair~~“Intangibles, ~~value~~Goodwill ofand Other” ~~the~~for ~~net~~licenses. ~~assets~~Under at the ~~date~~requirements ofas ~~acquisition.~~set ~~Under~~out ~~Statement~~in ofASC ~~Financial~~350-10, licenses ~~Accounting~~are ~~Standards~~stated ~~No. 142~~at ~~“Goodwill~~cost and ~~Other~~amortized ~~Intangible~~over ~~Assets”~~their ~~(“SFAS~~remaining ~~No. 142”)~~legal ~~goodwill~~lives, estimated ~~acquired in a business combination with indefinite~~ useful lives ~~are~~or ~~not~~the ~~amortized;~~term ~~rather~~of the contracts, ~~goodwill~~whichever is ~~tested~~shorter. ~~for~~Upon becoming ~~impairment~~fully ~~annually~~amortized, orthe ~~more~~related ~~frequently~~cost ifand ~~events~~accumulated oramortization ~~changes~~are removed infrom ~~circumstances indicate~~ the ~~asset might be impaired~~accounts.

Impairment of Long-Lived Assets

In accordance with Statement of ~~Financial~~ASC ~~Accounting~~360-10-35 ~~Standards No. 144~~ “~~Accounting~~Property, ~~for~~Plant ~~the~~and ~~Impairment~~Equipment or– Subsequent ~~Disposal of Long-Lived Assets~~Measurement”, the Company reviews the carrying value of its long-lived assets , which includes property, plant and equipment and ~~goodwill~~ licenses annually or whenever events or changes in circumstances indicate that the historical cost-carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of the asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value. The Company determined that there was a $2,060,000 impairment on equipment held for sale as of January 31, 2010, and continues to evaluate the remaining long-lived assets on an ongoing basis.

EVOLUTION RESOURCES, INC.

(A Development Stage Company)

July 31, 2009

Notes to the Consolidated Financial Statements (Continued)

recorded equal to the difference between the asset’s carrying value and fair value. The Company determined that there were no impairments of long-lived assets as of July 31, 2009.

Discount on Series A convertible preferred stock

The Company has allocated the proceeds received from Series A convertible preferred stock between the underlying instruments and has recorded the conversion feature as a liability in accordance with ~~Statement~~ASC of815-10, ~~Financial Accounting Standards No. 133~~ “~~Accounting for~~ Derivative ~~Instruments~~ and Hedging ~~Activities”~~– ~~(“SFAS~~and ~~No. 133”)~~Related Disclosures”, and related interpretations. The conversion feature and certain other features that are considered embedded derivative instruments, such as a conversion reset provision, a penalty provision and redemption option, have been recorded at their fair value within the terms of ~~SFAS~~ASC ~~No. 133~~815-10 as its fair value can be separated from the convertible note and its conversion is independent of the underlying note value. The conversion liability is marked to market each reporting period with the resulting gains or losses shown on the Statement of Operations.

Derivatives

The Company accounts for derivatives in accordance with ~~Statement~~ASC of815-10, ~~Financial Accounting Standards No. 133~~ “~~Accounting for~~ Derivative ~~Instruments~~ and Hedging ~~Activities”~~– ~~(“SFAS No. 133”)~~ and ~~the~~Related ~~related~~Disclosures”, ~~interpretations.~~ASC ~~SFAS~~815-10 ~~No. 133,~~ as amended, requires companies to recognize all derivative instruments as either assets or liabilities in the consolidated balance sheet at fair value. The accounting for changes in the fair value of a derivative instrument depends on: (i) whether the derivative has been designated and qualifies as part of a hedging relationship, and (ii) the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument based upon the exposure being hedged as either a fair value hedge, cash flow hedge or hedge of a net investment in a foreign operation. At ~~July~~ January 31, ~~2009~~2010, the Company had not entered into any transactions which were considered hedges under ~~SFAS~~ASC No815-10. ~~133~~ In conjunction with the issuance of Series A convertible preferred stock, the Company has accounted for the embedded derivative liability in accordance with ASC 815-15, “Derivatives & Hedging – Embedded Derivatives” and performs a mark to market analysis at the end of each reporting period.

Financial instruments

The Company evaluates its Series A convertible preferred stock to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ~~SFAS~~ASC ~~No. 133~~815-15, “Derivatives and ~~related~~Hedging ~~interpretations~~– Embedded ~~including~~Derivatives”, ~~Emerging~~and ~~Issues~~related ~~Task~~interpretations ~~Force~~including ~~(“EITF”)~~ASC ~~Issue No. 00~~815-19 40, “~~Accounting~~Derivatives ~~for Derivative Financial Instruments Indexed to,~~ and ~~Potentially~~Hedging ~~Settled~~– Contracts in, aEntities ~~Company's~~ Own ~~Stock~~Equity” ~~(“EITF Issue No~~. ~~00-19”).~~ The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the Statement of Operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity.

In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification under ~~SFAS~~ASC ~~No. 133~~815-10, “Derivative and Hedging – and Related Disclosures”, are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date.

The fair value model utilized to value the various compound embedded derivatives in the secured convertible notes comprises multiple probability-weighted scenarios under various assumptions reflecting the economics of the secured convertible notes, such as the risk-free interest rate, expected Company stock price and volatility, likelihood of conversion and or redemption, and likelihood of default status and timely registration. At inception, the fair value of the single compound embedded derivative was bifurcated from the host debt contract and recorded as a derivative liability which resulted in a reduction of the initial notional carrying amount of the secured convertible notes (as unamortized discount which will be amortized over the term of the notes under the effective interest method).

EVOLUTION RESOURCES, INC.

(A Development Stage Company)

July 31, 2009

Notes to the Consolidated Financial Statements (Continued)

of the single compound embedded derivative was bifurcated from the host debt contract and recorded as a derivative liability which resulted in a reduction of the initial notional carrying amount of the secured convertible notes (as unamortized discount which will be amortized over the term of the notes under the effective interest method).

Fair value of financial instruments

The Company follows Statement of Financial Accounting Standards No. 107 “Disclosures about fair value of Financial Instruments” (“SFAS No. 107”) for disclosures about fair value of its financial instruments and has adopted ~~Financial~~and ~~Accounting~~follows ~~Standards~~ASC ~~Board~~820-10, (“~~FASB”) No. 157 “~~Fair Value Measurements and Disclosures” ~~(“SFAS~~for ~~No. 157”)~~measurement toand ~~measure~~disclosures ~~the~~about fair value of its financial instruments. ASC ~~SFAS~~820-10 ~~No. 157~~ establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ~~SFAS~~ASC ~~No. 157~~ 820-10 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by ~~SFAS~~ASC ~~No. 157~~820-10 ~~are~~ described below:

Level 1		Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2		Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3		Pricing inputs that are generally observable inputs and not corroborated by market data.

As defined by ~~SFAS~~ASC ~~No. 107~~820-10, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale, which was further clarified as the price that would be received to sell an asset or paid to transfer a liability (“an exit price”) in an orderly transaction between market participants at the measurement date. The carrying amounts of the Company’s financial assets and liabilities, such as cash, ~~accounts~~and ~~receivable,~~cash equivalents, prepayments and other current assets, accounts payable, ~~taxes~~and ~~payable,~~ accrued expenses, accrued interest taxes payable, and other current liabilities, approximate their fair values because of the short maturity of these instruments. The Company’s note payable approximates the fair value of such instrument based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangement at ~~July~~ January 31, ~~2009~~2010.

The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis, consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at July 31, 2009, nor gains or losses are reported in the statement of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the interim period then ended.7

The Company revalues its derivative liability at every reporting period and recognizes gains or losses in the consolidated statement of operations that are attributable to the change in the fair value of the derivative liability. The Company has no other assets or liabilities measured at fair value on a recurring basis.

Revenue recognition

The Company follows the guidance of ~~the~~ASC ~~Securities~~605-10, ~~and~~“Revenue ~~Exchange~~Recognition” ~~Commission’s~~to ~~Staff~~recognize revenue ~~Accounting~~related ~~Bulletin~~to ~~104~~its ~~(“SAB No~~operations. ~~104”)~~ ~~for revenue recognition.~~ The Company recognizes revenue when it is realized or realizable and earned ~~less estimated future returns~~. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. and inventory held for sale is sold.

Income taxes

The Company accounts for income taxes under ~~Statement~~ASC of740-10, ~~Financial Accounting Standards No. 109~~ “~~Accounting for~~ Income Taxes” ~~(“SFAS No~~. ~~109”).~~ Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.

7ASC 740-10-25, “Income Taxes – Recognition” addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. ASC 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. ASC 740-10-40, “Income Taxes – De-recognition”, provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of ASC 740-10-25.

~~EVOLUTION~~Net ~~RESOURCES,~~income ~~INC.~~(loss) per common share

Net income (loss) per common share is computed pursuant to ASC 260-10, “Earnings per Share”, Basic net income per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during each period to reflect the potential dilution that could occur. There were 2,857,143 shares of common stock issuable under the conversion feature of the Series A ~~Development~~convertible ~~Stage~~preferred ~~Company)~~stock and 1,000,000 warrants outstanding as of January 31, 2010, which were excluded from the calculation because their effect would be anti-dilutive.

July 31, 2009

Notes to the Consolidated Financial Statements (Continued)

tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.

The Company adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48 “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under FIN 48, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. FIN 48 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of FIN 48.

Net loss per common share

Net loss per common share is computed pursuant to Statement of Financial Accounting Standards No. 128 “Earnings Per Share” (“SFAS No. 128”). Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period to reflect the potential dilution that could occur from common shares issuable through Series A convertible preferred stock, which excludes 2,857,143 shares of common stock issuable under the conversion feature of the Series A convertible preferred stock for the period from April 9, 2009 (Inception) through May 31, 2009.

Recently Issued Accounting Pronouncements

InOn June 5, 2003, the United States Securities and Exchange Commission (“SEC”) adopted final rules under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”), as amended by SEC Release No. 33-~~8934~~9072 on ~~June 26~~October 13, ~~2008~~2009. Under ~~Commencing~~the provisions ~~with~~of ~~its~~Section ~~annual~~404 ~~report~~of ~~for~~ the ~~fiscal~~Sarbanes-Oxley ~~year~~Act, ~~ending~~public ~~October 31,~~companies ~~2010,~~and ~~the~~their independent ~~Company~~auditors ~~will~~are beeach required to ~~include a~~ report ofto ~~management~~the public on ~~its~~the effectiveness ~~internal~~of ~~control~~a ~~over~~company’s ~~financial~~internal ~~reporting~~controls. The ~~internal~~smallest ~~control~~public companies ~~report~~with ~~must~~a ~~include~~public afloat ~~statement~~below of$75 ~~management’s~~million ~~responsibility~~have ~~for~~been ~~establishing~~given extra time to design, implement and ~~maintaining~~document ~~adequate~~these internal ~~control~~controls ~~over~~before ~~its~~their ~~financial~~auditors ~~reporting;~~are required to attest to the effectiveness of ~~management’s~~these ~~assessment~~controls. This extension of time will expire beginning with the ~~effectiveness~~annual reports of ~~its~~companies with ~~internal~~fiscal ~~control~~years ~~over~~ending ~~financial~~on ~~reporting~~or asafter ofJune ~~year~~15, ~~end;~~2010. Commencing ~~and~~with its ofannual report for the ~~framework~~year ~~used~~ending byOctober ~~management~~31, 2010, the Company will be required to ~~evaluate~~include ~~the~~a ~~effectiveness~~report of ~~the~~management ~~Company’s~~on its internal control over financial reporting. The internal control report must include a statement

Furthermore, in the following fiscal year, it is required to file the auditor’s attestation report separately on the Company’s internal control over financial reporting on whether it believes that the Company has maintained, in all material respects, effective internal control over financial reporting.

In May 2009, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 165, Subsequent Events (“SFAS 165”), which establishes general standards of accounting for, and requires disclosure of, events that occur after the balance sheet date but before financial statements are issued or are available to be issued. The Company adopted the provisions of SFAS 165 as of July 31, 2009. The adoption of these provisions did not have a significant impact on the Company’s consolidated financial statements, other than those presented in the subsequent event footnote to the financial statements.

~~EVOLUTION~~· ~~RESOURCES,~~Of ~~INC.~~management’s responsibility for establishing and maintaining adequate internal control over its financial reporting;

(A· ~~Development~~Of ~~Stage~~management’s ~~Company)~~assessment of the effectiveness of its internal control over financial reporting as of year end; and

~~July~~· 31Of the framework used by management to evaluate the effectiveness of the Company’s internal control over financial reporting. Furthermore, ~~2009~~it is required to file the auditor’s attestation report separately on the Company’s internal control over financial reporting on whether it believes that the Company has maintained, in all material respects, effective internal control over financial reporting.

~~Notes~~In June 2009, tothe FASB approved the ~~Consolidated~~“FASB ~~Financial~~Accounting ~~Statements~~Standards Codification” (~~Continued~~the “Codification”) as the single source of authoritative nongovernmental U.S. GAAP to be launched on July 1, 2009. The Codification does not change current U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all the authoritative literature related to a particular topic in one place. All existing accounting standard documents will be superseded and all other accounting literature not included in the Codification will be considered non-authoritative. The Codification is effective for interim and annual periods ending after September 15, 2009.

In ~~June~~ August 2009, the FASB issued ~~SFAS~~the ~~No. 168, The~~ FASB Accounting Standards ~~Codification~~Update ~~and~~No. 2009-04 ~~the~~“Accounting ~~Hierarchy~~for Redeemable ofEquity ~~Generally~~Instruments ~~Accepted~~- ~~Accounting~~Amendment ~~Principles~~to ~~(“SFAS~~Section ~~168~~480-10-S99”). ~~SFAS~~which represents ~~168~~an ~~will~~update ~~become~~to ~~the~~section ~~single source of authoritative nongovernmental U.S. generally accepted accounting principles (“GAAP”)~~480-10-S99, ~~superseding~~distinguishing ~~existing~~liabilities ~~FASB~~from equity, ~~American~~per ~~Institute~~EITF ofTopic ~~Certified Public Accountants (“AICPA”)~~D-98, ~~Emerging~~Classification ~~Issues Task Force (“EITF”),~~ and ~~related~~Measurement ~~accounting literature. SFAS 168 reorganizes the thousands~~ of Redeemable ~~GAAP pronouncements into roughly 90 accounting topics and displays them using a consistent structure~~Securities. The ~~Also~~Company ~~included~~does isnot ~~relevant~~expect ~~SEC guidance organized using~~ the adoption ~~same~~of ~~topical~~this ~~structure~~update into ~~separate sections. SFAS 168 will be effective for financial statements issued for reporting periods that end after September 15, 2009. This will~~ have ana material impact on ~~the~~its ~~Company’s~~ consolidated financial position, ~~statements~~results ~~since~~of ~~all~~operations ~~future~~or ~~references~~cash ~~to authoritative accounting literature will be references in accordance with SFAS 168~~flows.

In ~~April~~ August 2009, the ~~Financial~~FASB issued the FASB Accounting Standards ~~Board~~Update ~~(FASB)~~No. 2009-05 ~~issued~~“Fair ~~FASB~~Value Measurement ~~Staff~~and ~~Position~~Disclosures ~~(FSP)~~Topic ~~Financial~~820 ~~Accounting~~– ~~Standard~~Measuring ~~(FAS)~~Liabilities ~~157-4~~at ~~“Determining~~Fair Value”, which provides amendments to subtopic 820-10, Fair Value Measurements ~~When~~and Disclosures – Overall, for the ~~Volume~~fair ~~and~~value ~~Level~~measurement of liabilities. This ~~Activity~~update provides clarification that in circumstances in which a quoted price in an active market for the ~~Asset~~identical orliability ~~Liability~~is ~~Have~~not available, ~~Significantly~~a ~~Decreased~~reporting ~~and~~entity ~~Identifying~~is ~~Transactions~~required ~~That~~to ~~Are~~measure ~~Not~~fair ~~Orderly”.~~value ~~Based~~using onone or more of the ~~guidance,~~following iftechniques: an1. ~~entity~~A ~~determines~~valuation technique that ~~the~~uses: ~~level~~a. The quoted price of ~~activity~~the ~~for~~identical liability when traded as an asset b. Quoted prices for similar liabilities or ~~liability~~similar ~~has~~liabilities ~~significantly~~when ~~decreased~~traded ~~and~~as ~~that~~assets. a2. ~~transaction~~Another valuation technique that is ~~not~~consistent ~~orderly,~~with ~~further~~the ~~analysis~~principles of ~~transactions~~topic or820; ~~quoted~~two examples ~~prices~~would isbe ~~needed~~an income approach, ~~and~~such as a ~~significant~~present ~~adjustment~~value technique, or a market approach, such as a technique that is based on the amount at the measurement date that the reporting entity would pay to transfer the ~~transaction~~identical liability or ~~quoted~~would ~~prices~~receive ~~may~~to beenter ~~necessary~~into tothe ~~estimate~~identical ~~fair~~liability. ~~value~~The amendments in ~~accordance~~this ~~with~~update ~~Statement~~also ofclarify ~~Financial~~that ~~Accounting~~when ~~Standards~~estimating ~~(SFAS)~~the ~~No. 157~~fair ~~“Fair~~value ~~Value~~of ~~Measurements”.~~a ~~This~~liability, a ~~FSP~~reporting entity is not required to beinclude ~~applied~~a ~~prospectively~~separate ~~and~~input isor ~~effective~~adjustment ~~for~~to other ~~interim~~inputs ~~and~~relating ~~annual~~to ~~periods~~the ~~ending~~existence ~~after~~of ~~June 30,~~a ~~2009~~restriction ~~with~~that ~~early~~prevents ~~adoption~~the transfer ~~permitted~~of ~~for~~the ~~periods~~liability. ~~ending~~The ~~after~~amendments ~~March 15,~~in ~~2009.~~this ~~The~~update ~~company~~also ~~will~~clarify ~~adopt~~that ~~this~~both a ~~FSP~~quoted price in an active market for ~~its~~the ~~quarter~~identical ~~ending~~liability ~~June 30,~~when ~~2009.~~traded ~~There~~as isan asset in an active market when no ~~expected~~adjustments to the quoted price of the asset are required are Level 1 fair value measurements. The Company does not expect the adoption of this update to have a material impact on ~~the~~its consolidated financial ~~statements~~position, results of operations or cash flows.

In ~~April~~ September 2009, the FASB issued ~~FSP~~the ~~FAS~~FASB ~~107-1 and~~ Accounting ~~Principles~~Standards ~~Board~~Update ~~(APB) 28~~No. 2009-108 “~~Interim~~Earnings ~~Disclosures~~Per ~~about~~Share ~~Fair~~– Amendments ~~Value~~to ofSection ~~Financial Instruments~~260-10-S99”.,which ~~The~~represents ~~FSP~~technical ~~amends~~corrections to ~~SFAS~~topic ~~No. 107~~260-10-S99, ~~“Disclosures~~Earnings ~~about~~per ~~Fair~~share, ~~Value~~based ofon ~~Financial~~EITF ~~Instruments”~~Topic toD-53, ~~require~~Computation anof ~~entity~~Earnings toPer ~~provide~~Share for ~~disclosures~~a ~~about~~Period ~~fair~~that ~~value~~includes ofa ~~financial~~Redemption ~~instruments~~or inan ~~interim~~Induced ~~financial~~Conversion ~~information.~~of ~~This~~a ~~FSP~~Portion isof a toClass beof ~~applied~~Preferred ~~prospectively~~Stock and isEITF ~~effective~~Topic ~~for~~D-42, ~~interim~~The ~~and~~Effect ~~annual~~of ~~periods~~the ~~ending~~Calculation ~~after~~of Earnings ~~June 30,~~per ~~2009~~Share ~~with~~for ~~early~~the ~~adoption~~Redemption ~~permitted~~or ~~for~~Induced ~~periods~~Conversion ~~ending~~of ~~after March 15, 2009~~Preferred Stock. The ~~company~~Company ~~will~~does ~~include~~not expect the ~~required~~adoption ~~disclosures~~of inthis update to have a material impact on its ~~quarter~~consolidated ~~ending~~financial ~~June 30~~position, ~~2009~~results of operations or cash flows.

In ~~April~~ September ~~2008~~2009, the FASB issued ~~FSP FAS 142-3, “Determination of~~ the ~~Useful~~FASB ~~Life~~Accounting ofStandards ~~Intangible~~Update ~~Assets”~~No. 2009-09 ~~The~~“Accounting ~~FSP~~for Investments-Equity ~~states~~Method ~~that~~and inJoint ~~developing~~Ventures ~~assumptions~~and ~~about~~Accounting ~~renewal~~for orEquity-Based Payments ~~extension options used~~ to ~~determine~~Non-Employees”. This ~~the~~update ~~useful~~represents ~~life~~a correction ofto anSection ~~intangible asset~~323-10-S99-4, anAccounting ~~entity~~by ~~needs~~an toInvestor ~~consider its own historical experience adjusted~~ for ~~entity~~ Stock-~~specific~~Based ~~factors.~~Compensation InGranted ~~the~~to ~~absence~~Employees of ~~that experience,~~ an ~~entity~~Equity ~~shall~~Method Investee. ~~consider~~Additionally, ~~the~~it ~~assumptions~~adds ~~that~~observer ~~market~~comment ~~participants~~Accounting ~~would~~Recognition ~~use~~for ~~about~~Certain Transactions ~~renewal~~Involving orEquity ~~extension~~Instruments ~~options.~~Granted ~~This FSP is~~ to beOther ~~applied~~Than Employees to ~~intangible~~the ~~assets acquired after January 1, 2009~~Codification. The ~~adoption~~Company ofdoes ~~this~~not ~~FSP~~expect ~~did~~the ~~not~~adoption to have ana material impact on ~~the~~its consolidated financial ~~statements~~position, results of operations or cash flows.

In September 2009, the FASB issued the FASB Accounting Standards Update No. 2009-12 “Fair Value Measurements and Disclosures Topic 820 – Investment in Certain Entities That Calculate Net Assets Value Per Share (or Its Equivalent)”, which provides amendments to Subtopic 820-10, Fair Value Measurements and Disclosures-Overall, for the fair value measurement of investments in certain entities that calculate net asset value per share (or its equivalent). The amendments in this update permit, as a practical expedient, a reporting entity to measure the fair value of an investment that is within the scope of the amendments in this update on the basis of the net asset value per share of the investment (or its equivalent) if the net asset value of the investment (or its equivalent) is calculated in a manner consistent with the measurement principles of Topic 946 as of the reporting entity’s measurement date, including measurement of all or substantially all of the underlying investments of the investee in accordance with Topic 820.

The amendments in this update also require disclosures by major category of investment about the attributes of investments within the scope of the amendments in this update, such as the nature of any restrictions on the investor’s ability to redeem its investments a the measurement date, any unfunded commitments (for example, a contractual commitment by the investor to invest a specified amount of additional capital at a future date to fund investments that will be make by the investee), and the investment strategies of the investees. The major category of investment is required to be determined on the basis of the nature and risks of the investment in a manner consistent with the guidance for major security types in U.S. GAAP on investments in debt and equity securities in paragraph 320-10-50-1B. The disclosures are required for all investments within the scope of the amendments in this update regardless of whether the fair value of the investment is measured using the practical expedient. The Company does not expect the adoption to have a material impact on its consolidated financial position, results of operations or cash flows.

In January 2010, the FASB issued the FASB Accounting Standards Update No. 2010-01 “Equity Topic 505 – Accounting for Distributions to Shareholders with Components of Stock and Cash”, which clarify that the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a potential limitation on the total amount of cash that all shareholders can elect to receive in the aggregate is considered a share issuance that is reflected in EPS prospectively and is not a stock dividend for purposes of applying Topics 505 and 260 (Equity and Earnings Per Share (“EPS”)). Those distributions should be accounted for and included in EPS calculations in accordance with paragraphs 480-10-25- 14 and 260-10-45-45 through 45-47 of the FASB Accounting Standards codification. The amendments in this Update also provide a technical correction to the Accounting Standards Codification. The correction moves guidance that was previously included in the Overview and Background Section to the definition of a stock dividend in the Master Glossary. That guidance indicates that a stock dividend takes nothing from the property of the corporation and adds nothing to the interests of the stockholders. It also indicates that the proportional interest of each shareholder remains the same, and is a key factor to consider in determining whether a distribution is a stock dividend.

In January 2010, the FASB issued the FASB Accounting Standards Update No. 2010-02 “Consolidation Topic 810 – Accounting and Reporting for Decreases in Ownership of a Subsidiary – a Scope Clarification”, which provides amendments to Subtopic 810-10 and related guidance within U.S. GAAP to clarify that the scope of the decrease in ownership provisions of the Subtopic and related guidance applies to the following:

1. A subsidiary or group of assets that is a business or nonprofit activity

2. A subsidiary that is a business or nonprofit activity that is transferred to an equity method investee or joint venture

3. An exchange of a group of assets that constitutes a business or nonprofit activity for a noncontrolling interest in an entity (including an equity method investee or joint venture).

The amendments in this Update also clarify that the decrease in ownership guidance in Subtopic 810-10 does not apply to the following transactions even if they involve businesses:

1. Sales of in substance real estate. Entities should apply the sale of real estate guidance in Subtopics 360-20 (Property, Plant, and Equipment) and 976-605 (Retail/Land) to such transactions.

2. Conveyances of oil and gas mineral rights. Entities should apply the mineral property conveyance and related transactions guidance in Subtopic 932-360 (Oil and Gas-Property, Plant, and Equipment) to such transactions.

If a decrease in ownership occurs in a subsidiary that is not a business or nonprofit activity, an entity first needs to consider whether the substance of the transaction causing the decrease in ownership is addressed in other U.S. GAAP, such as transfers of financial assets, revenue recognition, exchanges of nonmonetary assets, sales of in substance real estate, or conveyances of oil and gas mineral rights, and apply that guidance as applicable. If no other guidance exists, an entity should apply the guidance in Subtopic 810-10.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

NOTE 3 – GOING CONCERN

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the accompanying ~~consolidated~~ financial statements, the Company ~~had~~has a deficit accumulated during the development stage of $82,~~505~~286,~~259~~669 at ~~July~~ January 31, ~~2009~~2010, with noa net loss of $5,767,070 with no revenues since inception.

While the Company is attempting to commence operations and generate revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to increase revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues. ~~The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.~~

EVOLUTION RESOURCES, INC.

(A Development Stage Company)

July 31, 2009

Notes to the Consolidated Financial Statements (Continued)

NOTE 4 – ACQUISITIONS

On July 14, 2009, Evolution entered into a Stock Purchase Agreement (the “Agreement”) whereby the Company acquired all of the issued and outstanding common stock of Liquafaction Corporation (“Liqua Corp”) and fifty-three percent of the membership interests of Liqua Ethanol, LLC (“Liqua LLC”) (the shares of Liqu Corp and Liqua LLC are referred to collectively as the “Equity”). The purchase price of the Equity is as follows: (i) $35,000 upon the execution of this Agreement, to be paid from a prior deposit, (ii) a total of $30,000 due in equal weekly payments for eight weeks from the date hereof and (iii) $150,000 upon the earlier of the completion of the Moses Lakes project funding or 120 days from the date of the Agreement. Additionally, the Shareholder received a (i) warrant to purchase 1,150,000 shares of Buyer’s common stock at an exercise price of $7.00 per share and (ii) the right to receive additional warrants to purchase up to an additional 400,000 shares at an exercise price of $7.00 per share based on various performance objectives contained in the Agreement (collectively, the “Warrants”). The fair value of the warrants was $3,258,409 at acquisition, and $3,327,882 as of July 31, 2009. The changes in fair market value are included in the Consolidated Statement of Operations loss on derivatives totaling $5,426,789 as of July 31, 2009.

The primary reason for this acquisition was to obtain an immediate distribution vehicle for Evolution’s cellulosic ethanol.

The following table summarizes the preliminary fair values assigned of the assets acquired and the liabilities assumed at the date of acquisition:

Current assets	$	––
Property and equipment	5,486,219
Total assets	5,486,219
Less:
Total liabilities	2,059,425
Total purchase price	$	3,426,794

The excess of the purchase price over the fair value of assets acquired and liabilities assumed was allocated to goodwill. This purchase price allocation is preliminary and subject to change based on the completion of a third party appraisal.

~~EVOLUTION~~The financial ~~RESOURCES,~~statements ~~INC.~~do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

(ANOTE 4 ~~Development~~– ~~Stage Company)~~ACQUISITIONS

On July 14, 2009, Evolution entered into a Stock Purchase Agreement (the “Agreement”) whereby the Company acquired all of the issued and outstanding common stock of Liquafaction Corporation (“Liquafaction”) and fifty-three percent of the membership interests of Liqua Ethanol, LLC (“Liqua LLC”) (the shares of Liquafaction and Liqua LLC are referred to collectively as the “Equity”). The purchase price of the Equity is as follows: (i) $35,000 upon the execution of this Agreement, to be paid from a prior deposit, (ii) a total of $30,000 due in equal weekly payments for eight weeks from the date hereof and (iii) $150,000 upon the earlier of the completion of the Moses Lakes project funding or 120 days from the date of the Agreement. Additionally, the Shareholder received a (i) warrant to purchase 1,150,000 shares of Buyer’s common stock at an exercise price of $7.00 per share and (ii) the right to receive additional warrants to purchase up to an additional 400,000 shares at an exercise price of $7.00 per share based on various performance objectives contained in the Agreement (collectively, the “Warrants”). The fair value of the warrants was $3,258,409 at acquisition, and $3,403,273 as of October 30, 2009. The changes in fair market value are included in the Consolidated Statement of Operations loss on derivatives totaling $4,151,660 as of October 31, 2009. No additional warrant valuation was needed or performed at January 31, 2010, as the warrants were cancelled on October 30, 2009.

~~Notes~~Liqua toLLC is a subsidiary of Liquafaction, however it has no operations, no assets or liabilities, and therefore the ~~Consolidated~~Company ~~Financial~~has ~~Statements~~not ~~(Continued)~~shown any related noncontrolling interest on the balance sheet or statement of operations. Any future operations will be reported accordingly.

~~The~~In ~~following~~July, 2009, ~~pro~~in ~~forma~~conjunction ~~information~~with ~~assumes~~ the acquisition of Liquafaction, the ~~Equity~~Company ~~occurred~~formed Moses asLake ~~of April 9~~Biorefinery, ~~2009~~LLC, ~~inception.~~in ~~The~~the ~~pro~~State ~~forma~~of ~~results~~Washington. ~~are~~At ~~not~~October ~~necessarily~~31, ~~indicative~~2009, Moses ofLake ~~what~~Biorefinery ~~actually~~had ~~would~~no ~~have~~operations, ~~occurred~~no ~~had~~assets ~~the~~or ~~acquisition~~liabilities. ~~been~~It inwas formed ~~effect~~ for ~~the~~future ~~period~~operations ~~presented~~related to the liquafaction acquisition.

~~UNAUDITED~~On October ~~PRO~~30, ~~FORMA~~2009, ~~STATEMENT~~the OFcompany ~~OPERATIONS~~entered into an agreement with the seller of Liquafaction to cancel the initial consideration of 1,150,000 warrants to purchase the Buyer’s shares of common stock at $7.00 per share in exchange for the issuance of 500,000 shares of the Buyer’s common stock. The Seller’s basis in the Company’s stock was determined to be market of $4.00 per share value as of October 30, 2009. The 1,150,000 warrants have a derivative liability of $3,403,273 as of October 30, 2009. Therefore the Company recorded an accounting entry to increase to APIC by $1,403,273 in conjunction with the cancellation of the stock warrants and the issuance of 500,000 common shares at market value.

AsThe objective of ~~July~~this project was to convert a former idled corn ethanol facility into a pilot-scale biorefinery that produces ethanol and associated co-products from wheat straw in order to test biomass pretreatment and enzymatic hydrolysis technology on a relatively small scale prior to final engineering and construction of a larger 3 31million gallon/year cellulosic production facility at the same location. The planned facility was to utilize the area’s abundant wheat straw for conversion into high value co-products: ethanol, ~~2009~~single cell protein, lignin, and syrup.

	Evolution Resources, Inc. for the Period From April 9, 2009 (Inception) to July 31, 2009			Liquafaction Corporation for the Period From April 9, 2009 to July 31, 2009		Pro Forma Adjustments			Pro Forma as Adjusted
Total revenues	$	—		$	—	$	—		$	—
Cost of sales	—			—		—			—
Gross profit	—			—		—			—
Depreciation and amortization	—			—		182,874			182,874
Selling, general and administrative	391,991			—		—			391,991
Operating income (loss)	(391,991		)	—		(182,874		)	(44,168		)
Other income (expense)	—			—		—			6,162
Net income (loss)	$	(391,991	)	$	—	$	182,874	)	$	(6,001,654	)
Basic and diluted:
Net loss									$	(0.35	)
Weighted-average shares:
Basic and diluted									17,081,077

The following table summarizes the fair values assigned of the assets acquired and the liabilities assumed on the date of acquisition, July 14, 2009. The initial valuation of was based on preliminary fair values assigned to the assets prior to the third party evaluation.

NOTE 5 – PREPAID CONSULTING EXPENSES AND LICENSE

	July 14, 2009
Property & equipment	$	10,631,970
Inventory available for sale		5,150,000
Total assets		15,781,970
Liabilities		1,868,749
Total acquisition price	$	3,473,364

~~Prepaid~~Evolution Resources ~~consulting~~purchase ~~expenses~~price totaled $3,473,363 for the Liquafaction acquisition. The excess of the fair value of the assets acquired and liabilities ~~license~~assumed atover ~~May 31~~the purchase price was allocated to negative goodwill. In accordance with In accordance with ASC 805-30-50-1 f.2 and ASC 805-30-25-4,, ~~2009~~“Intangibles, ~~consisted~~Goodwill and Other”, the negative goodwill was recorded as an extraordinary gain on acquisition, resulting from the bargain purchase of the ~~following:~~Liquafaction net assets.

Consulting	$	20,000
Deposit		20,000
License		10,000
	$	50,000

The Company engaged a third party appraisal firm, The Mentor Group, (“Mentor”) to perform a valuation of the assets of Liquafaction. The new third party appraisal was then used to determine the current fair market value of the assets which included the discounted value on the plant equipment and the fair market value of the inventory available for sale at January 31, 2010.

Consulting Agreements

The Company has entered into a consulting agreement with Chrysalis Energy Partners, LLC to provide professional services through February 28, 2010. The Company is to pay $10,000 per month for these services. The first payment for June 2009 of $10,000 was paid on May 28, 2009 and is included in prepaid expenses.

~~EVOLUTION~~NOTE 5 – ~~RESOURCES,~~LICENSING ~~INC.~~ AGREEMENT

(A Development Stage Company)

July 31, 2009

Notes to the Consolidated Financial Statements (Continued)

The Company has entered into a consulting agreement with Byrne & Company Limited on May 14, 2009 to provide consulting services as directed to develop a business plan and two fully functional financial models. The Company is to pay $10,000 per month for these services. The Company can terminate this agreement at any time with or without cause. A retainer payment of $5,000 was paid on May 28, 2009 and is included in prepaid expenses.

The Company has entered into a consulting agreement with Wilson Sonsini to provide consulting services commencing in June 2009 and ending twelve months later. The Company is to pay $10,000 per month for these services. A payment of $5,000 was made on May 28, 2009 and is included in prepaid expenses.

Licensing Agreement

On April 27, 2009, the Company entered into a licensing agreement with Bio-Process Innovation, Inc. (“BPI”) to license its patented and proprietary processes and associated yeast(s). The Company ~~will~~then ~~have~~amended tothis ~~pay~~agreement aon November ~~one time design/usage fee of $0.05 per gallon ethanol design capacity per year in two installments; 50% upon Project Commencement~~18, ~~as defined~~2009, ~~and~~effective ~~50%~~October ~~upon the plant meeting production nameplate capacity over a period of two weeks operation. In addition BPI will charge a monthly Royalty fee equal to 4% of the Net Pre-Tax Revenues~~31, ~~as defined, from the sale of all products and co-products produced in each of the Company’s refineries~~2009.

The Company ~~will~~was be granted the exclusive and non-transferable rights to the use of BPI technologies associated with the production of ethanol and co-products from cellulosic biomass materials within the United States for an exclusivity fee of $1,500,000 paid in installments of no less than $255,000 per month, with the total amount being paid ~~within~~in 24full in no more than 36 months from the date of ~~this~~ the agreement. Exclusive ~~After~~rights ~~the~~to 24BPI ~~months~~technologies ~~the~~may ~~Company~~be ~~can~~maintained ~~keep~~by the ~~this~~Company ~~exclusivity~~ for an annual maintenance fee of $150,000 paid to BPI beginning 36 months from the date of the agreement.

~~The~~In conjunction ~~Company~~with ~~prepaid~~the amended agreement dated November 18, 2009, the Company and BPI entered into a convertible note as of the date of the agreement for the total amount of $101,500,000 onbearing ~~May 29~~interest of 8% per annum. As the monthly payments or other payments are made, ~~2009~~the innote ~~association~~amount ~~with~~shall ~~this~~be ~~License~~reduced dollar for dollar. The note shall be convertible into common shares of Evolution common stock at the election of the licensee such that any remaining balance owed as of month thirty, may be converted into the shares at the market price that may be liquidated over the succeeding 6 months in equal proportional amounts each month.

~~NOTE~~In December 62009, –the ~~NOTE~~Company ~~RECEIVABLE~~and BPI terminated the licensing agreement and subsequent convertible note as the Company moved away from using wheat straw biomass for the cellulosic ethanol project to a wood biomass, therefore rendering the licensing agreement no longer appropriate.

~~On July~~ ~~31,~~NOTE ~~2009,~~6 we– entered into a Securities Purchase Agreement with certain accredited investors pursuant to which we sold $215,000 aggregate principal amount of senior secured notes due November 30, 2009, and five-year warrants to purchase 1,000,000 shares of common stock at an exercise price of $5.00 per share (the “Warrant”). A discount on the note was recorded totaling $35,000. Amortization on the discount totaled $0 for the period ended July 31, 2009.NOTES PAYABLE

~~NOTE~~In connection 7with —the ~~PROPERTY~~acquisition of Liquafaction on July 14, ~~PLANT AND~~2009, ~~EQUIPMENT~~ the Company assumed certain secured notes payable held by Liquafaction related to the financing of the facilities. The following table outlines the notes payable at January 31, 2010.

The Company had no property, plant and equipment as of April 9, 2009. As of July 31, 2009, property, plant and equipment consisted principally of the assets related to the Liqua Corp business acquired in the Agreement as follows:

Note Holder	Date of Issuance	Maturity Date	Interest Rate		Issue Amount
NWNRG/ADAB (1)	4/27/2007	1/31/2010		9.25%	$	360,000
Shawn Bunce (2)	5/29/2007	1/31/2010		12.00		358,000
Bruce Blackwell (3)	8/1/2008	1/31/2010		12.00		220,000
Harborview Master Fund LP	7/31/2009	11/30/2009		18.00		215,000
Bruce Blackwell (4)	5/1/2007	1/31/2010		12.00		200,000
Marguerite Heiser (5)	11/26/2007	10/31/2010		9.25		11,000
Pat Brannen (6)	2/15/2008	8/9/2008		9.50		10,000
					$	1,374,000
Accrued Interest					$	317,648

Description		Total (In Thousands)
Production Facilities		5,486,219
Fixtures and equipment
Total cost
Accumulated Depreciation		(0	)
Net property, plant and equipment	$	5,486,219

Note (1): Secured by boiler and 2 centrifuges

~~Depreciation~~Note ~~expense~~(2): Secured ~~for~~by ~~the~~elevator ~~period ended July 31, 2009 was $0.~~property

Note (3): Secured by main ethanol plant equipment

Note (4): Secured by evaporator

Note (5):

Marguerite Heiser entered into 3 separate promissory notes with Liquafaction; $39,600, $30,000 and $4,650. The note for $39,600 was secured by equipment and was due on August 9, 2008. When the principal balance and interest due was not paid as per the initial agreement, Marguerite Heiser enforced the security agreement and the equipment was sold to reduce her total notes payable balance. A verbal agreement with Marguerite Heiser was entered into for $11,000 and is included in the notes payable balance at January, 31, 2010.

Note (6): Secured by Freightliner trailer

On July 31, 2009, we entered into a Securities Purchase Agreement with certain accredited investors pursuant to which we sold $215,000 aggregate principal amount of senior secured notes bearing 18% interest per annum, due November 30, 2009, and five-year warrants to purchase 1,000,000 shares of common stock at an exercise price of $5.00 per share (the “Warrant”). The Notes are secured by (i) substantially all of the assets of Evolution and its subsidiaries and (ii) the pledge of Evolution of its entire equity interest in each of its subsidiaries. The Notes are guaranteed by each of Evolution’s subsidiaries. Evolution and each of its

subsidiaries also entered into an account control agreement to secure the Notes. With appropriate notice, Evolution has the option to repay the Notes prior to the due date. At the date of original issuance, the Company recognized a discount on the note of $215,000 representing the fair value of the warrants at issuance. The debt discount was fully amortized at January 31 2010.

~~EVOLUTION~~On December ~~RESOURCES~~3, ~~INC~~2009, the Company entered into a forbearance agreement with Harborview Master Fund, LP due to a default under the securities purchase agreement where the Company had failed to pay the principal amount and interest due on November 30, 2009. The lender has agreed to forebear exercising its rights and remedies in connection with the default provisions of the agreement. In conjunction with the forbearance agreement, the Company made the required interest payments on the principal balance to the Harborview Master Fund of $12,561 on December 3, 2009 and $6,250 on December 30, 2009 in to satisfy the forbearance agreement. The principal balance remains outstanding at January 31, 2010.

(AThe Company ~~Development~~is ~~Stage~~in default on the total notes payable principal and interest amounts totaling $1,691,648 at January 31, 2010. The Company) begins accruing penalties on the unpaid portions of the notes payable after January 31, 2010 at 18% per annum. The total accrued interest due and payable related to the notes payable was $317,648 at January 31, 2010.

~~July~~NOTE 7 – ~~31,~~COMMITMENTS ~~2009~~AND CONTINGENCIES

~~Notes~~The Company entered into a consulting agreement on January 6, 2010 with Byrne & Company Limited to ~~the~~provide ~~Consolidated~~consulting ~~Financial~~services ~~Statements~~related ~~(Continued)~~to project feasibility studies, business plan development, site selection evaluation, site development, financial

~~Evolution’s~~modeling, project ~~accounting~~analysis ~~policy~~and isadditional tostrategic ~~record~~analysis. In ~~depreciation~~conjunction with onthis aagreement, ~~straight-line~~Thomas ~~basis~~Byrne ~~over~~will ~~the~~hold ~~estimated useful lives of~~ the ~~various assets as follows:~~

Furniture and fixtures		5-7 Years
Machinery and equipment		5-10 Years
LNG Production Facilities		15 Years

office of Vice President of Project Development. Byrne & Company will receive as compensation, $25,000 per month for services performed. This agreement supersedes the original agreement with Byrne & Company signed on May 14, 2009.

~~NOTE~~The Company 8entered –into ~~NOTES~~a ~~PAYABLE~~consulting agreement on January 6, 2010 with Business Resource and Technology International, Inc. (“BRTI”) to provide consulting services in relation to biomass to fuel matters on a strategic, technical and economic nature. In exchange for consulting services, BRTI will receive $3,500 per month.

InThe Company ~~connection~~entered into a consulting agreement on December 29, 2009 with ~~the~~Dr. Richard ~~acquisition~~Phillips ofto ~~Liqua~~provide ~~Corporation~~consulting services in relation to biomass to fuel matters on a strategic, 9%technical ~~Promissory~~and ~~Notes~~economic ~~totaling~~nature. In exchange for consulting services, Dr. Phillips will each receive $13,~~159,000~~500 ~~were~~per month. This ~~due~~agreement ~~and~~supersedes ~~payable~~the ~~upon~~original ~~maturity~~agreement ofwith ~~December 31~~Dr. Phillips dated March 11, ~~2008~~2009. Mr. Phillips will also become president of the Company's wholly owned subsidiary, Evolution Development, LLC, which holds intellectual property and manage the Company's research and development efforts.

OnThe Company ~~July 31, 2009, we~~ entered into a ~~Securities~~consulting ~~Purchase~~agreement ~~Agreement~~on ~~with~~December ~~certain accredited investors pursuant to which we sold $215~~29,~~000~~ ~~aggregate~~2009 ~~principal~~with ~~amount~~Dr. ofHasan Jameel ~~senior~~to ~~secured~~provide ~~notes~~consulting ~~due~~services ~~November 30,~~in ~~2009, and~~relation ~~five-year~~to ~~warrants~~biomass to ~~purchase~~fuel ~~1,000,000~~matters ~~shares~~on a ofstrategic, ~~common~~technical ~~stock~~and ateconomic ~~an exercise price of $5~~nature.00 In ~~per~~exchange ~~share~~for consulting ~~(the~~services, ~~“Warrant”)~~Dr. AtJameel ~~the~~will ~~date~~each ofreceive ~~original issuance, the Company recognized a discount on the note of~~ $~~215~~3,~~000~~500 ~~representing~~per ~~the fair value of the warrants~~month. ~~Amortization on the debt discount totaled $0 for the period ended July 31, 2009.~~

~~NOTE~~The Company 9entered –into ~~STOCKHOLDERS’~~a ~~EQUITY~~formal engagement on December 22, 2009 with the law firm of Wilson Sonsini Goodrich & Rosati to provide legal advice on governmental and non-governmental relations matters, along with corporate formation and other forms of strategic financing. An initial retainer of $10,000 was required upon signing of the engagement letter and would be drawn down upon as expenses were incurred.

The Company entered into a Testing Services Agreement with North Carolina State University on December 9, 2009 to conduct fermentation testing and lignin filtration studies. The testing process will be conducted over a one year period beginning December 2009 and continue through November 2010. The cost for this testing process will be approximately $150,000.

The Company has entered into a consulting agreement on February 28, 2009 with Chrysalis Energy Partners, LLC, (“Chrysalis”) to provide professional services through February 28, 2010. The Company is to pay $10,000 per month for these services. At February 28, 2010, the Company and Chrysalis have continued the prior agreement on a month to month basis.

The Company assumed the main ethanol plant lease which Liquafaction had entered into in September 2006. The original lease terms ran from June 1, 2006 to and including May, 31, 2009. The initial lease called for monthly rent of $5,000 for the first twelve months, escalating to $10,000 per month thereafter. At the acquisition date, Liquafaction was behind on its monthly plant rent payments. The Company entered into a new lease agreement for the ethanol plant which at the time included the late rental payments of $170,000 from the initial lease and continuing monthly rental payments of $10,000 per month. The Company is currently in default on these monthly leases.

The Company entered into an agreement to join the “North Carolina State University Wood to Ethanol Research Consortium” (“WERC”) in order to have access to WERC’s body of research surrounding new developments in ethanol production. The Company paid $50,000 for membership in the WERC beginning June 1, 2009 through June 1, 2011. The prepaid balance of this membership was $33,333 at January 31, 2010.

The Company retained the service of Gordon, Arata, McCollam, Duplantis & Eagan, LLP to provide outside legal services. The Company paid a $20,000 retainer in advance and has been charged $18,614 through January 31, 2010, leaving a prepaid balance of $1,386.

The Company rents warehouse space in Medera, CA from Olberti, LLC (“Olberti”) for $4,500 per month, which originated in December 2007 in conjunction with the Liquafaction acquisition to store a large burner/economizer that is needed for the operation of the ethanol plant in Moses Lake, WA. The Company has no formal written lease agreement with Olberti. As of January 31, 2010, the company owed $73,500 in rent to Olberti.

The Company leases a warehouse and water well/rights in Moses Lake, WA at the Liquafaction facility to store inventory held for sale and draw water for use in the plant. The lease for the warehouse and water well/rights is $4,200 and $3,000 per month respectively. The lease originated in May 2007. The Company is in default on these leases.

NOTE 8 – STOCKHOLDERS’ EQUITY

Common Stock

October 30, 2009, effective November 12, 2009, Evolution Resources, Inc. (“Evolution”) entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Harborview Master Fund, L.P. (“Harborview”) pursuant to which Evolution sold, and Harborview purchased, 75,000 shares of Evolution’s common stock, par value $.001 (the “Shares”). In consideration of the Shares, Harborview agreed to the following: (i) to amend the conversion price of the Series A Convertible Preferred Stock issued

by Evolution to a $4.00 per share fixed conversion price and (ii) to amend the exercise price of the Warrant to Purchase Shares of Common Stock issued to Harborview on July 31, 2009 (the “Original Warrant”) to a $7.00 per share exercise price subject to adjustment except that in certain circumstances the conversion price may not be reduced below $4.00 per share (collectively, the “Amendments”). The fair value of the warrants was $2,020,572 as of January 31, 2010. The changes in fair market value of the warrants of $361,588 are included in the Consolidated Statement of Operations loss on derivatives totaling $471,174 as of January 31, 2010.

On October 30, 2009, the Company entered to an agreement with the Seller of Liquafaction to cancel the outstanding 1,150,000 warrants in exchange for 500,000 shares of the Company’s common stock. On November 25, 2009, the Company determined that the seller of Liquafaction was in breach of his purchase agreement with the Company. As a result, the company did not issue the 500,000 shares of common stock to the seller until the seller remedies the breach of the agreement.

On November 12, 2009, a majority shareholder and officer of the Company issued 3,775,000 shares of his personal common stock to various stakeholders, employees, and directors of the Company for services performed. No additional shares of the Company’s common stock were issued therefore the number of shares issued and outstanding was not impacted by this transaction. This transaction resulted in total compensation expense of 10,268,000, which will be amortized over the restricted period and the amortized expense of $2,250,521 is presented on the Consolidated Statement of Operations at January 31, 2010.

Series A Convertible Preferred Stock

On May 27, 2009, the Company entered into a Series A Convertible Preferred Stock Purchase Agreement (the “Purchase Agreement”) with Harborview Master Fund, L.P. (“Harborview”). Pursuant to the Purchase Agreement, Harborview purchased an aggregate of 22,500 shares of Series A Convertible Preferred Stock (“Series A Preferred Stock”), for aggregate gross proceeds equal to $225,000. The purchase price will be paid as follows: (i) $120,000 was paid on the Merger Date, May 27, 2009 (ii) $55,000 will be paid upon the filing of a registration statement and (iii) $50,000 upon the effectiveness of the registration statement.

The Series A Preferred Stock shall not be entitled to receive any dividends, have a liquidation value of $100 per share and shall be entitled to vote together with the holders of the common stock of the Company, on an as converted basis.

The Series A Preferred Stock may be converted into common stock of the Company at the option of the holder by using a conversion price which shall be equal to the liquidation value of $100 divided by the lesser of (i) $1.00, as adjusted or (ii) 70% of the average (a) if the common stock of the Company is then listed or quoted on a trading market, the daily volume weighted average price of the common stock for such date, for the five trading day period preceding the conversion date; (b) if the common stock of the Company is not listed or quoted on a trading market but are then reported in the “Pink Sheets”, the most recent bid price per share, for the five trading day period preceding the conversion date; or (c) in all other cases, the fair market value of a share of common stock as determined by an independent valuation expert.

The Company followed the accounting treatment in ~~SFAS~~ASC ~~150~~825-10, “~~Accounting for Certain~~ Financial Instruments ~~with Characteristics of Both Liabilities and Equity~~”,” ~~SFAS~~ASC 815-10, ~~133~~ “~~Accounting~~Derivative ~~for~~and ~~Derivative~~Hedging ~~Instruments~~– and ~~Hedging~~Related ~~Activities~~Disclosures”, and ~~EITF~~ASC 00815-19 40, “~~Accounting~~Derivatives ~~for Derivative Financial Instruments Indexed to,~~ and ~~Potentially~~Hedging ~~Settled~~– Contracts in, aEntities ~~Company’s~~ Own ~~Stock.~~ Equity” The Company recognized a derivative liability upon the issuance of $120,000 of the Series A Preferred Stock that values the compound derivatives based on a probability weighted discounted cash flow model. The significant assumptions used for the valuation model were: the underlying stock price was used as the fair value of the common stock even though it is thinly traded, projected volatility of 215%, based on the average of 7 comparable alternative energy companies, the Company would complete its registration requirements by October 31, 2009, the holder would automatically convert at a stock price of $1.50 if the Company was not in default, the holder would convert on a quarterly basis in amounts not to exceed 25% of the average trading volume, the average trading volume would increase at 5% per quarter, and the holder would redeem if the stock price fell to

EVOLUTION RESOURCES, INC.

(A Development Stage Company)

July 31, 2009

Notes to the Consolidated Financial Statements (Continued)

$0.10 or lower. As the value of the derivative liability was greater than the face value of the Series A Preferred Stock, only the par value was prescribed to the Series A Preferred Stock. On date of issuance the fair value of the Series A Preferred Stock derivative liability was $1,302,380. At July 31, 2009, the fair value of the Series A Preferred Stock derivative liability was $1,387,468. The changes in the fair value of the warrants for the period ending July 31, 2009, is included in the Consolidated Statement of Operations loss on derivatives totaling $5,426,789.

As of July 31, 2009, there were 12,000 shares of Series A Preferred Stock outstanding.

NOTE 6 – SUBSEQUENT EVENTS

Management performed an evaluation of the Company’s activity through September 21, 2009, the date these financials were issued to determine if they must be reported. The Management of the Company determined that there are certain reportable subsequent events to be disclosed as follows:

Effective August 4, 2009, Herbert Meyer was appointed as a member of the Board of Directors.

On August 10, 2009, Evolution Resources, Inc., a Nevada corporation (the “Company”) entered into a Membership Agreement (the “Membership Agreement”) with North Carolina University at Raleigh, NC (the “University”). As part of the Membership Agreement, the Company agreed to pay the University membership dues of $25,000 for membership during the period of June 1, 2009 through May 31, 2010 and additional membership dues of $25,000 for membership during the period of June 1, 2010 through May 31, 2011. In consideration for the payment of the membership dues, the Company will participate as a member of the Wood to Ethanol Research Consortium (“WERC”). The Company will receive prompt notice of all inventions made as a result of the research of the University and other members directly relating to the WERC. At such point, the Company will be entitled to negotiate a license for such inventions based on its level of participation with respect to filing for patent protection for the specified invention.

~~ITEM~~The Company recognized a derivative liability upon the issuance of $225,000 of the Series A Preferred Stock that values the compound derivatives based on a probability weighted discounted cash flow model. The significant assumptions used for the valuation model were: the underlying stock price was used as the fair value of the common stock even though it is thinly traded, projected volatility of 215%, based on the average of 7 comparable alternative energy companies, the Company would complete its registration requirements by October 31, 2009, the holder would automatically convert at a stock price of $1.50 if the Company was not in default, the holder would convert on a quarterly basis in amounts not to exceed 25% of the average trading volume, the average trading volume would increase at 5% per quarter, and the holder would redeem if the stock price fell to $0.10 or lower. As the value of the derivative liability was greater than the face value of the Series A Preferred Stock, only the par value was prescribed to the Series A Preferred Stock. At January 31, 2010, the fair value of the Series A Preferred Stock derivative liability was $2,806,931. The change in the fair value of the warrants for the period ending January 31, 2010, is $73,092 and is included in the Consolidated Statement of Operations loss on derivatives totaling $471,174.

~~MANAGEMENT'S~~NOTE 9 ~~DISCUSSION~~– ~~AND~~SUBSEQUENT ~~ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~EVENTS

Management performed an evaluation of the Company’s activity through April 20, 2010, the date these financials were issued to determine if they must be reported. The Management of the Company determined that there are certain reportable subsequent events to be disclosed as follows:

The Company entered into an operating agreement with Evolution Fuels Plazas, LLC and Legends Travel Centers, LLC. Evolution Fuels Plazas and Legends Travel Centers were formed on October 21, 2009 with the purpose to own and operate retail fueling stations and convenience stores, along with retail truck stop fueling stations and convenience stores. The Company will maintain a 19.90% minority interest in the operations of both Evolution Fuels Plazas and Legends Travel Centers, and Evolution Fuels, Inc. will hold the majority interest of 80.10%. Evolution Resources, Inc. is a guarantor on all of the leases pursuant to the operating agreement with Evolution Fuels Plazas, LLC.

On February 3, 2010, in conjunction with the operating agreements noted above, Evolution Fuels Plazas, LLC entered into three retail fuel station leases, two leases were for retail fueling stations and convenience stores in Topeka, Kansas and one unmanned fueling station in Manhattan, Kansas. Also on February 3, 2010, Legends Travel Centers, LLC entered into a retail truck stop fueling station, convenience store and restaurant in Mountainburg, Arkansas. Evolution Resources, Inc., its Chief Executive Officer, Dennis McLaughlin and its Principal Accounting Officer, Christopher Chambers are named as guarantors on the operating agreement with Evolution Fuels Plazas, LLC.

The Company entered into a consulting agreement with the Turnaround Management Company (“TTMC”) on February 3, 2010. The agreement was to provide consulting services to the Moses Lake, Washington site to determine the requirements to complete the design and start up and make operational an ethanol plant. The Company estimates the cost of these services to be approximately $30,000 for the entire project. TTMC has not begun its analysis in conjunction with the agreement at January 31, 2010.

On March 1, 2010, in conjunction with the operating agreement noted above, Evolution Fuels Plazas, LLC entered into one lease for retail fueling station and convenience store in Dallas, Texas. The station will be located in the heart of the Dallas metropolis, immediately adjacent to the upscale Park Cities neighborhood, and will serve as the first "marquee" location for the Company's planned rollout of its branded stations. Evolution Fuels plans to uniquely image the station and offer specialty foods, beverages and other products in order to help create a recognizable brand as it rolls out additional stations. Evolution Resources, Inc., its Chief Executive Officer, Dennis McLaughlin and its Principal Accounting Officer, Christopher Chambers are named as guarantors on the operating agreements with Evolution Fuels Plazas, LLC.

On April 7, 2010, Evolution Resources received written default notices from two notes payable holders, Bruce Blackwell and Shaun Bunce, in relation to outstanding notes payable related to the Liquafaction acquisition. The total amount of the notes payable covered under the written default notices were $778,000. The Company is in default on the remaining notes payable related to the Liquafaction acquisition, however has not received written notice from the remaining note holders.

On April 8, 2010, Evolution Fuels Plazas, LLC received written default and termination notices for all properties leased from J&J Developments, Inc. (“J&J”). J&J is the lessor of the retail fuel stations and convenience stores, for which Evolution Resources, Inc., its Chief Executive Officer, Dennis McLaughlin and its Principal Accounting Officer, Christopher Chambers are named as guarantors on the operating agreements with Evolution Fuels Plazas, LLC. Evolution Fuels Plazas and J&J are currently in dispute in relation to several items in the respective leases, and no resolution has been made. Evolution Fuels Plazas hopes to amicably resolve these outstanding issues in a timely manner.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Information set forth herein contains "forward-looking statements" which can be identified by the use of forward-looking terminology such as "believes," "expects," "may,” “should" or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy. No assurance can be given that the future results covered by the forward-looking statements will be achieved. The Company cautions readers that important factors may affect the Company’s actual results and could cause such results to differ materially from forward-looking statements made by or on behalf of the Company. These factors include the Company’s lack of historically profitable operations, dependence on key personnel, the success of the Company’s business, ability to manage anticipated growth and other factors identified in the Company's filings with the Securities and Exchange Commission, press releases and/or other public communications.

Description of Property

Our principal offices are located at 43 Yazoo Ave, Clarksdale, Mississippi 38614, and our telephone number is (662) 655-1077. We currently do not have a website. We do not currently maintain any investments in real estate, real estate mortgages or securities of persons primarily engaged in real estate activities, nor do we expect to do so in the foreseeable future.

Overview

~~On May 27~~Evolution Resources, ~~2009~~Inc. ~~(the~~is ~~“Merger~~a ~~Date”),~~development ~~BBN,~~stage ~~and~~company ~~Evolution~~focused ~~and~~on ~~Evolution~~the ~~Resources~~advancement ~~Acquisition~~of ~~Corporation~~the profitable ~~(“ERAC”),~~production ~~a wholly-owned subsidiary~~ of ~~Evolution~~cellulosic ~~entered~~ethanol ~~into~~and anbiodiesel. ~~Agreement~~Our ~~and~~business ~~Plan~~plan contains ofcertain ~~Merger~~proposed ~~(the~~projects ~~“Merger~~that ~~Agreement”).~~if ~~Pursuant~~successfully toimplemented ~~the~~and completed, ~~terms~~will ofleverage ~~the~~existing ~~Merger~~assets ~~Agreement,~~and oninfrastructure ~~May 27,~~to ~~2009~~(a) ~~ERAC~~significantly shorten ~~merged~~the ~~with~~time ~~and~~frame ~~into~~required ~~Evolution,~~to ~~with~~establish ~~Evolution~~commercial ~~remaining~~scale ascellulosic ~~the~~ethanol production ~~surviving~~facilities ~~corporation~~and (~~the~~b) “~~Merger~~repurpose”). certain industrial facilities to provide key biofuels production components.

Plan of Operation

We are currently focused on building a team of industry experts to advise and assist our management as the project plans are developed. The team will include members from the scientific, financial, legal, and government policy communities who are all well experienced in the field of renewable fuels.

~~The strategic overview of Evolution as follows:~~Corporate History

·We were incorporated in the State of Nevada in March 2005.

~~Development~~On ofMay 27, an2009, ~~4 million~~the ~~gallon~~Company, ~~per~~Evolution ~~year~~Resources, ~~(mmgy)~~Inc., ~~cellulosic~~a ~~ethanol~~Delaware ~~production~~corporation (“Evolution”) ~~facility~~and ~~located~~Evolution inResources anAcquisition ~~area~~Corp. ~~with~~(“ERAC”), a ~~large~~wholly-owned subsidiary ~~availability~~ of ~~straw~~the ~~biomass.~~Company, ~~The~~entered ~~project~~into isan ~~attractive~~Agreement asand ~~the~~Plan ~~initial~~of ~~cellulosic~~Merger. Pursuant ~~facility due~~ to the ~~fact~~terms ~~that~~of the ~~site~~Merger ~~for~~Agreement, aERAC ~~proposed~~merged ~~facility~~with ~~has~~and ~~existing~~into Evolution, ~~ethanol~~with ~~components~~Evolution ~~and~~remaining ~~equipment,~~as ~~initial~~the ~~design~~surviving ~~work~~corporation ~~for~~and ~~the~~as ~~project~~our ~~has~~sole wholly-owned ~~already~~subsidiary. After ~~been~~the ~~completed,~~closing ~~and~~of ~~certain~~the ~~permits~~merger, ~~for~~we ~~ethanol~~changed our ~~production~~name ~~already~~from ~~exist~~BBN atGlobal ~~the~~Consulting, ~~site~~Inc. ~~These~~to ~~elements~~Evolution Resources, ~~combined~~Inc. ~~with~~to reflect the ~~goal~~business of ~~engineering~~our ~~and~~principal ~~constructing~~subsidiary. aBecause ~~relatively~~of ~~small~~the ~~commercial~~merger, ~~scale~~we ceased ~~production~~to ~~facility,~~be ~~provide~~a ~~the~~“shell ~~potential~~company” toas ~~complete~~that ~~the~~term ~~project~~is ~~and~~defined ~~bring~~in itRule ~~online~~405 inof asthe Securities ~~little~~Act asand ~~seven~~Rule ~~months~~12b-2 of the Exchange Act.

As of the closing of the merger, each issued and outstanding share of common stock of Evolution was converted into the right to receive 15,296,077 shares of our common stock, which constitutes approximately 89.55% of our outstanding common stock.

·Prior to the merger, we were a shell company, and we had no assets or liabilities. As a result of the merger transaction described above, the financial statements presented are our consolidated financial statements including our wholly-owned subsidiary, Evolution (which is the operating entity).

Development of a 60 mmgy cellulosic ethanol production facility located adjacent to an existing pulping facility. The project will leverage the existing mill assets for the handling of large quantities of wood biomass and the capability to produce pulp cellulose, and will utilize a proprietary technology to convert the cellulose to fermentable sugars.Recent Events

·On July 14, 2009, Evolution entered into a Stock Purchase Agreement (the “Agreement”) whereby the Company acquired all of the issued and outstanding common stock of Liquafaction Corporation (“Liquafaction”) and 53% of the membership interests of Liqua Ethanol, LLC (“Liqua LLC”) (the shares of Liquafaction and Liqua LLC are referred to collectively as the “Equity”). The purchase price of the Equity is as follows: (i) $35,000 upon the execution of this Agreement, to be paid from a prior deposit, (ii) a total of $30,000 due in equal weekly payments for eight weeks from the date hereof and (iii) $150,000 upon the earlier of the completion of the Moses Lakes project funding or 120 days from the date of the Agreement. Additionally, the seller received a (i) warrant to purchase 1,150,000 shares of Buyer’s common stock at an exercise price of $7.00 per share and (ii) the right to receive additional warrants to purchase up to an additional 400,000 shares at an exercise price of $7.00 per share based on various performance objectives contained in the Agreement (collectively, the “Warrants”).

~~Development~~On October of30, 2009, the Company entered into an ~~existing~~agreement 20with ~~mmgy~~the ~~biodiesel~~seller ~~production~~of Liquafaction ~~facility~~to ~~that~~cancel isthe ~~currently~~initial ~~hampered~~consideration byof 1,150,000 warrants to purchase the ~~lack~~Buyer’s shares of ~~affordable~~common ~~feedstock~~stock ~~oils~~at $7.00 ~~The~~per ~~project~~share ~~includes~~in exchange for the ~~acquisition~~issuance of a500,000 ~~nearby~~shares ~~oilseed~~of ~~crusher~~the ~~that~~Buyer’s ~~was~~common ~~recently~~stock. The Seller’s ~~closed,~~basis ~~and~~in the ~~plan~~Company’s ~~calls~~stock ~~for~~was ~~modifications~~determined to ~~the~~be ~~crusher~~market toof ~~activate~~$4.00 itper share ~~for~~value ~~soybeans~~as of October 30, ~~with~~2009. The 1,150,000 warrants have a derivative liability of $3,403,273 as of October 30, 2009. Therefore the Company ~~extracted~~recorded ~~oil~~an accounting entry to beincrease ~~shipped~~APIC toby $1,403,273 in conjunction with the ~~biodiesel~~cancellation ~~facility~~of the stock warrants and the ~~meal~~issuance toof 500,000 becommon ~~sold~~shares inat market value. No additional warrant valuation was needed or performed at January 31, 2010, as the ~~local~~warrants ~~markets~~were cancelled on October 30, 2009.

In order to fund the development of the projects, acquire certain assets, and perform the required engineering and construction work involved with each project, Evolution will need to raise approximately $82 million in a mix of equity, debt, and federal government grants/guarantees.

Presently, Evolution does not have any agreements or understandings to acquire, or secure access to, any of the projects, the land or facilities described above that would be necessary to develop these projects. As such, no assurance can be made that any of the above described projects will ever be developed.

Operations

As the formation of the Company is as of April 9, 2009, there are no comparative results of operations to prior periods. The acquisition of Liquafaction Corporation (“Liqua Corp”) and fifty-three percent of the membership interests of Liqua Ethanol, LLC (“Liqua LLC”) comparative results also have not been provided, as the Liqua Corp and Liqua LLC were in development stages and had no previous production. The operational expenses related to this acquisition would not be comparative with current operations.

Results of Operations

Revenues. From our inception to the period ended July 31, 2009, we have had no revenues. We do not expect to earn revenues in the near future.

Operating Expenses. From our inception to the period ended July 31, 2009, we incurred $391,991 in operating expenses.

Other Income and Expenses. From our inception to the period ended July 31, 2009, we recognized $5,426,789 related to derivative liabilities and changes in market values during the period.

Liquidity and Capital Resources

As of July 31, 2009, we had $0 cash on hand. We are in the very early stages of development.

Based on our cash flow projections, we expect that the net proceeds from our July 31, 2009, Securities Purchase Agreement with certain accredited investors pursuant to which we sold $215,000 aggregate principal amount of senior secured notes, will be sufficient to satisfy our cash needs for at least three to six months and to enable us to have sufficient capital liquidity to engage various consultant and independent contractors to implement our initial plans to develop the facilities discussed above. However, if our expenses exceed our expectations, we may exhaust such funds even sooner. In any event, we will likely seek to raise additional funds through public or private offerings of our securities during the next three to twelve months. If we are unable to raise additional funds on a timely basis or at all, any progress with respect to our exploration activities may be adversely affected.

Consultants and Independent Contractors. We have used and intend to use approximately $150,000 of the raise to obtain key biodiesel and ethanol industry consultants and independent contractors to assist us in the development of the facilities described above.

Presently, we do not have any agreements or understandings with any potential consultants or independent contractors. As such, no assurance can be made that we will be able to retain the appropriate people or, if we are able to retain people, that the terms will be favorable to us.

Liquafaction, both individually and through Liqua Ethanol, LLC of which Liquafaction owns 53%, owns an idle corn ethanol facility located in Moses Lake, Washington. The Company intended to convert the facility into a large demonstration/small commercial-scale bio-refinery that produces ethanol and associated co-products from wheat straw.

Liqua LLC is a subsidiary of Liquafaction, however it has no operations, no assets or liabilities, and therefore the Company has not shown any related minority interest on the balance sheet or income statement. Any future operations will be reported accordingly.

In July, 2009, in conjunction with the acquisition of Liquafaction, the Company formed Moses Lake Biorefinery, LLC, in the state of Washington. At October 31, 2009, Moses Lake Biorefinery had no operations, no assets or liabilities. It was formed for future operations related to the Liquafaction acquisition.

On July 31, 2009, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain accredited investors pursuant to which we sold $215,000 aggregate principal amount of senior secured notes due November 30, 2009 (the “Notes”) and five-year warrants to purchase 1,000,000 shares of common stock at an exercise price of $5.00 per share (the “Warrant”).

The Notes bear interest at a rate of 18% per annum, which is payable quarterly beginning on October 1, 2009. The Notes are secured by (i) substantially all of our assets and subsidiaries and (ii) the pledge of our entire equity interest in each of our subsidiaries. The Notes are guaranteed by each of our subsidiaries. We and all of our subsidiaries also entered into an account control agreement to secure the Notes. With appropriate notice, we have the option to repay the Notes prior to the due date.

On November 15, 2009 the Company entered into an operating agreement with Evolution Fuels Plazas, LLC and Legends Travel Centers, LLC. Evolution Fuels Plazas and Legends Travel Centers were formed on October 21, 2009 with the purpose to own and operate retail fueling stations and convenience stores, along with retail truck stop fueling stations and convenience stores. The Company will maintain a 19.90% minority interest in the operations of both Evolution Fuels Plazas and Legends Travel Centers, and Evolution Fuels, Inc. will hold the majority interest of 80.10%. Evolution Resources, Inc. is a guarantor on all of the leases pursuant to the operating agreement with Evolution Fuels Plazas, LLC.

On November 25, 2009, the Company determined that the seller of Liquafaction was in breach of his purchase agreement with the Company. As a result, the company did not issue the 500,000 shares of common stock to the seller until the seller remedies the breach of the agreement.

Projects

The proposed projects include the following:

Development of a 4 million gallon per year (mmgy) cellulosic ethanol production facility located in an area with a large availability of straw biomass. The project is attractive as the initial cellulosic facility due to the fact that the site for the proposed facility has existing ethanol components and equipment, initial design work for the project has already been completed, and certain permits for ethanol production already exist at the facility. These elements, combined with the goal of engineering and constructing a relatively small commercial scale production facility, provide the potential to complete the project and bring it online in as little as relatively quickly.

Development of a 60 mmgy cellulosic ethanol production facility to be located adjacent to an existing pulping facility. The project will leverage the existing mill assets for the handling of large quantities of wood biomass and the capability to produce pulp cellulose, and will utilize a proprietary technology to convert the cellulose to fermentable sugars.

In order to fund the development of the projects, acquire certain assets, and perform the required engineering and construction work involved with each project, we will need to raise approximately $200 million in a mix of equity, debt, and federal government grants/guarantees.

Presently, Evolution has completed the acquisition of Liquafaction Corporation that will allow the Company to pursue the 4 million gallon per year project described in the first bullet point above. Although the Company is in negotiations for the next bullet point project described above, it does not have any agreements or understandings to acquire, or secure access to, that project, the land or facilities described above that would be necessary to develop this project. As such, no assurance can be made that the above-described projects will ever be developed.

Plan of Operations

The renewable energy sector is in a unique situation. The American Recovery and Reinvestment Act of 2009 have five main objectives in spending the $787 billion dollars that has been allotted. The objectives are:

1.	To preserve and create jobs and to promote economic recovery

2.	To assist those most impacted by the recession

3.	To provide investments needed to increase economic efficiency by spurring technological advances in science and health

4.	To invest in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits

5.	To stabilize State and local government budgets in order to minimize and avoid reduction in essential services and counterproductive state and local tax increases.

The recession hit the renewable energy industry very hard. The loss of jobs and reduction in incomes impacted the US miles driven by billions of miles. This took the pressure off the demand for gasoline and creating an oversupply thus significantly reduces the price at the pump. This left a number of renewable energy projects that were not well capitalized in financial trouble. There are some assets that are in the right locations and priced to allow for the potential of a significant increase in value when the economy returns and the demand for energy increases.

Evolution Resources has researched and discovered a number of these opportunities in the States of Washington, Mississippi, and Louisiana. The team assembled can repurpose and upgrade the assets acquired at a significant discount. The team is also in a position to test new technologies and to provide renewable energy at a cost competitive price. New grant and low interest loan programs are available from the Federal and State agencies through the Department of Energy, Department of Agriculture, Department of Defense and State Economic Development agencies that were allocated stimulus money to revitalize and expand the renewable energy industry. These programs will allow not only significant leveraging of the equity dollars but matching of these dollars with grants on a one for one basis and in some limited cases a five to one match.

The Company is concentrating the majority of its efforts on projects in the Mississippi and Louisiana Delta area, where it has garnered significant governmental support from these two states. Economic conditions in this region have deteriorated to the extent that changes in certain industrial sectors are critical for the livelihood of many of the towns and cities. Evolution is actively engaged with state and local governments, as well as regional economic development authorities, who are assisting with the development of the Company’s project plans.

The Company’s business plan contains certain proposed projects that will leverage existing distressed assets and infrastructure to:

a) Significantly shorten the time frame required to establish commercial scale cellulosic ethanol production facilities

b) “Repurpose” distressed industrial facilities to provide key biofuels production systems

c) Beat the competition to profitable production of renewable fuels

The projects involve the production of cellulosic ethanol – ethanol produced from biomass sources such as wood chips, straws, and other plant matter – and the production of biodiesel – a fuel made from animal fats or vegetable oils.

Evolution’s management team has spent the last three years working in the renewable fuels industry and through this experience has identified the opportunities described above. It has built a team of industry experts to advise and assist the Company’s management as the project plans are developed. The team includes members from the scientific, financial, legal, and government policy communities who are all well experienced in the field of renewable fuels.

Financial Summary for the period from November 1, 2009 to January 31, 2010

Revenue: From November 1, 2009 through January 31, 2010, we had no operating revenues. We do not expect to earn significant revenues in the near future.

Operating Expense: From November 1, 2009 through January 31, 2010, we incurred $3,188,018 in operating expenses which consisted of compensation expense related to restricted stock issuances of $2,250,521, professional and management fees of $516,024, depreciation and amortization of $146,750 and general and administrative expenses of $274,723.

Other Income and Expenses: From November 1, 2009 through January 31, 2010, we recognized a loss on write down of inventory held for sale of $2,060,000, $471,174 related to a loss on derivative liabilities and changes in market values during the period and recognized $47,878 in interest expense for the period ended January 31, 2010.

Liquidity and Capital Resources

As of January 31, 2010, we had $4,913 cash on hand. We are in the very early stages of development. We expect to rely upon funds raised from private placements, as well as future equity and debt offerings, current and future grant opportunities to implement our business and growth plan and to meet our liquidity needs going forward. However, we cannot assure you that such financing will be available to us on favorable terms, or at all. If, after utilizing the existing sources of capital that become available to the Company, further capital needs will be needed and if we are not successful in obtaining the financing, we may be forced to curtail our existing or planned future operations.

Consultants and Independent Contractors

Presently, we have certain agreements or understandings consultants and independent contractors. As such, no assurance can be made that we will be able to retain these consultants or other appropriate consultants/contractors or, if we are able to retain new consultants/contractors, that the terms will be favorable to us.

Net Cash from Continuing Operations – Operating Activity

Our cash flow from operations has been negative since the inception of the company. We do not anticipate that we will have a positive cash flow from operations for the remainder of 2009 and 2010. Whether we have positive cash flow in 2011 depends on whether we are able to continue to finance our current business plan and successfully complete our cellulosic ethanol facility. Failure to obtain such financing would have an adverse impact on financial position and results of operations and ability to continue as a going concern.

During the three month period ended January 31, 2010, we have incurred an operating loss net of tax of $5,767,070. This operating loss was primarily the result of a charge of $2,250,521 to compensation expense for restricted stock awards and loss on write down of inventory held for sale of $2,060,000. At January 31, 2010 we had negative capital (current assets less current liabilities) of $4,083,610.

During the three month period ended January 31, 2010, our net cash provided in operating activities was $2,692.

Net Cash from Continuing Operations - Investing Activities

For the three month period ended January 31, 2010, net cash from investing activities was $0.

Net Cash from Continuing Operations – Financing Activity

For the three month period ended January 31, 2010, net cash from financing activities was $0.

Critical Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

We are currently a developmental-stage company and have minimal operational revenues to date. The company follows the guidance in accordance with the principles of ASC 605-10, “Revenue Recognition” from 1) sales of ethanol from our production facilities when (a) persuasive evidence that an agreement exists; (b) the products have been delivered; (c) the prices are fixed and determinable and not subject to refund or adjustment; and (d) collection of the amounts due is reasonably assured and inventory held for sale is sold.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments and other short-term investments with a maturity of three months or less, when purchased, to be cash equivalents.

~~The Company will maintain cash and cash equivalent balances at one financial institution that is insured by the Federal Deposit Insurance Corporation up to $250,000.~~ 19

~~Use of Estimates~~Long-Lived Assets

The Company ~~preparation~~assesses the realizable value of ~~financial~~long-lived ~~statements~~assets infor ~~conformity~~potential impairment ~~with~~at ~~accounting~~least ~~principles~~annually ~~generally~~or ~~accepted~~when inevents ~~the~~and ~~United~~circumstances ~~States~~warrant ~~requires~~such ~~management~~a review. The tocarrying ~~make~~value ~~estimates~~of ~~and~~a ~~assumptions~~long-lived ~~that~~asset ~~affect~~is considered impaired when the ~~reported~~anticipated ~~amounts~~fair ofvalue ~~assets~~is ~~and~~less ~~liabilities~~than ~~and~~its ~~disclosure~~carrying value. In assessing the recoverability of ~~contingent~~our long-lived assets, we must make assumptions regarding estimated future cash flows and ~~liabilities~~other atfactors to determine the ~~date~~fair value of the ~~financial~~respective ~~statements~~assets. In ~~and~~addition, we must make assumptions regarding the ~~reported~~useful ~~amounts~~lives of ~~revenues~~these ~~and~~assets. The Company ~~expenses~~determined ~~during~~that ~~the~~there ~~reporting~~was ~~period.~~a ~~Actual~~$2,060,000 ~~results~~impairment ~~could~~on ~~differ~~equipment ~~from~~held ~~those~~for sale ~~estimates~~as of January 31, 2010, and continues to evaluate the remaining long-lived assets on an ongoing basis.

Project Development

Project development costs will be either expensed or capitalized. The costs of materials and equipment that will be acquired or constructed for project development activities, and that have alternative future uses, both in project development, marketing or sales, will be classified as property and equipment and depreciated over their estimated useful lives.

Fair Value of Financial Instruments

~~SFAS No. 107~~ASC-825-10, “~~Disclosures About Fair Value of~~ Financial Instruments,” requires the Company to disclose, when reasonably attainable, the fair market values of its accounts receivable, accounts payable, accrued expenses, deferred revenue and notes payable that are deemed to be financial instruments. The carrying amounts and estimated fair values of the Company’s financial instruments approximate their fair value due to their short-term nature.

Earnings ~~(loss)~~ per Common Share ~~(“EPS”)~~

The Company complies with ~~Statement~~ASC ~~of Financial Accounting Standards (“SFAS”) No. 128~~260-10, “Earnings ~~Per~~per Share,” which requires dual presentation of basic and diluted earnings per share. Basic EPS excludes dilution and is computed by dividing income (loss) available to common stockholders by the weighted-average common shares outstanding for the year. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.

Income Taxes

The Company complies with ~~SFAS~~ASC ~~No. 109~~740-10, “~~Accounting for~~ Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amounts expected to be realized.

Impairment of Long-Lived Assets:

In accordance with ~~SFAS~~ASC ~~No. 144~~360-10-35, “~~Accounting~~Plant, ~~for~~Property ~~the~~and ~~Impairment~~Equipment or– ~~Disposal of Long-Lived Assets~~Subsequent Measurement," long- lived assets, such as property and equipment and intangible assets are not subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability of asset groups to be held and used is measured by a comparison of the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of an asset group exceeds fair value of the asset group.

Derivative Instruments

The Company accounts for derivatives in accordance with ASC 815-10, “Derivatives & Hedging – and Related Disclosures” and the related interpretations. ASC 815-10 requires companies to recognize all derivative instruments as either assets or liabilities in the consolidated balance sheet at fair value. The accounting for changes in the fair value of a derivative instrument depends on: (i) whether the derivative has been designated and qualifies as part of a hedging relationship, and (ii) the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument based upon the exposure being hedged as either a fair value hedge, cash flow hedge or hedge of a net investment in a foreign operation. At October 31, 2009, the Company had not entered into any transactions which were considered hedges under ASC 815-10. In conjunction with the issuance of Series A convertible preferred stock, the Company has accounted for the embedded derivative liability in accordance with ASC 815-15, “Derivatives & Hedging – Embedded Derivatives” and performs a mark to market analysis at the end of each reporting period.

Off Balance Sheet Arrangements

We have no off-balance sheet arrangements.

~~ITEM~~Results of 3.Operations

~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~Revenue

~~The~~For ~~Company~~the three ismonth ~~subject~~period toended ~~certain~~January ~~market~~31, ~~risks~~2010, ~~including~~we ~~changes~~had inno operating ~~interest rates and currency exchange rates~~revenues. ~~The~~We do ~~Company does~~ not ~~undertake~~expect ~~any~~to ~~specific~~earn ~~actions~~significant torevenues ~~limit~~in ~~those~~the ~~exposures~~near future.

17Operating Expenses

~~ITEM~~For 4the three month period ended January 31, 2010, we incurred $3,188,018 in operating expenses which consisted of compensation expense related to restricted stock issuances of $2,250,521, professional and management fees of $516,024, depreciation and amortization of $146,750 and general and administrative expenses of $274,723.

~~CONTROLS~~Legal and ~~AND~~Accounting ~~PROCEDURES~~Expense

~~Pursuant~~For ~~to Rule 13a-15(b) under~~ the three ~~Securities~~month ~~Exchange~~period ~~Act~~ended ofJanuary ~~1934~~31 ~~(“Exchange Act”)~~2010, ~~the~~we ~~Company~~incurred ~~carried out an evaluation~~$45,614 ~~with~~in ~~the~~legal ~~participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”)~~ and ~~Chief Accounting Officer (“CAO”) (the Company’s principal financial and~~ accounting ~~officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report~~expense. ~~Based upon that evaluation~~ $11,114 ~~the~~was ~~Company’s~~related ~~CEO and CAO concluded that the Company’s disclosure controls and procedures are effective~~ to ~~ensure~~various ~~that~~normal ~~information~~course ~~required~~of business tooperations belegal ~~disclosed~~fees ~~by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized~~ and ~~reported~~$34,500 ~~within the time periods specified~~ in ~~the~~accounting ~~SEC’s~~fees ~~rules~~related ~~and~~to ~~forms,~~various reviews and ~~that~~filings ~~such~~with ~~information is accumulated and communicated to~~ the ~~Company’s~~Securities ~~management, including the Company’s CEO~~ and ~~CAO,~~Exchange ~~as appropriate, to allow timely decisions regarding required disclosure~~Commission.

~~Management’s~~Research and ~~Report~~Development ~~on Internal Controls over Financial Reporting~~Expense

~~Internal~~For ~~control over financial reporting is a process to provide reasonable assurance regarding~~ the three ~~reliability~~month ofperiod consolidated financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. There has been no change in the Company’s internal control over financial reporting during the quarter ended ~~April 30,~~January ~~2009 that has materially affected~~31, ~~or is reasonably likely to materially affect~~2010, ~~the~~we ~~Company’s~~have ~~internal~~had ~~control~~no ~~over~~research ~~financial~~and development ~~reporting~~expense.

The Company’s management, including the Company’s CEO and CAO, does not expect that the Company’s disclosure controls and procedures or the Company’s internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of the controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.Interest Expense

~~Management~~For ~~conducted an evaluation of~~ the three ~~effectiveness~~month ofperiod ~~our~~ended ~~internal~~January ~~control~~31, ~~over~~2010, ~~financial~~we ~~reporting~~incurred ~~based~~$35,146 ~~on the framework in Internal Control – Integrated Framework issued by the Committee~~ of ~~Sponsoring~~interest expense ~~Organizations~~related ofto ~~the~~interest ~~Treadway~~bearing ~~Commission.~~notes ~~Based~~payable onacquired ~~this~~in ~~evaluation, management concluded that~~ the ~~company’s internal control over financial reporting were effective as of July 31, 2009~~Liquafaction acquisition.

~~This quarterly report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting~~ITEM 3. QUANTATATIVE ~~Management's~~AND ~~report~~QUALITATIVE ~~was~~DISCLOSURES ~~not~~ABOUT subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this quarterly report.MARKET RISK

18There have been no material changes in our quantitative and qualitative disclosures about market risk from those disclosed in our 2009 Annual Report on Form 10-K. More detailed information concerning market risk can be found in “Item 7A. Quantitative and Qualitative Disclosures about Market Risk” in our 2009 Annual Report on Form 10-K dated as of, and filed with the SEC on, November 27, 2009, and our amended Annual Report on Form 10-K/A dated as of, and filed with the SEC on April 20, 2010.

~~PART~~ITEM 4. CONTROLS IIAND ~~- OTHER INFORMATION~~PROCEDURES

~~ITEM~~(a) Evaluation 1.of Disclosure Controls and Procedures

~~LEGAL~~As ~~PROCEEDINGS~~of the end of the period covered by this Quarterly Report on Form 10-Q, we conducted an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Accounting Officer of our disclosure controls and procedures (as defined in Rules13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, the Chief Executive Officer and Chief Accounting Officer have concluded that our disclosure controls and procedures were not effective as of January 31, 2010. As noted in our amended Annual Report on Form 10-K/A dated as of, and filed with the SEC on April 20, 2010, we are in the process of enhancing our disclosure controls and procedures.

~~Currently~~Due to the limited resources of the company in its initial development stage, we have limitations surrounding staffing resources to ensure transactions are ~~not~~adequately captured ~~aware~~and tracked along with the proper supervision of ~~any~~the ~~litigation~~accounting department. ~~pending~~We orhave ~~threatened~~begun byto orformulate ~~against~~additional controls and policies relating to internal control over financial reporting and disclosures, including preparation of accounting policies and procedures manual, containing among other things, detailed , expanded closing checklists, to guide our accounting personnel in addressing significant accounting issues in compliance with U.S. GAAP and SEC requirements. We have also replaced key accounting positions with more trained and experienced personnel to oversee the accounting ~~Company~~group, along with hiring of additional staff to ensure capture and tracking of financial information is more accurate. We continue to strive to improve our disclosure controls and procedures and continue to evaluate their effectiveness.

~~ITEM 2.~~21

~~UNREGISTERED~~(b) Changes ~~SALES~~in OFInternal ~~EQUITY~~Controls ~~SECURITIES~~over ~~AND~~Financial ~~USE OF PROCEEDS~~Reporting

~~Sales~~There have bybeen ~~BBN~~no changes in our internal controls over financial reporting that occurred during our fiscal quarter ended January 31, 2010 that have materially affected; or is reasonably likely to materially affect our internal control over financial reporting.

OnPART May 27, 2009 (the “Merger Date”), BBN Global Consulting, Inc. (“BBN”), Evolution Resources, Inc. (“Evolution”) and Evolution Resources Acquisition Corp. (“ERAC”), a wholly-owned subsidiary of BBN, entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, on May 27, 2009 ERAC merged with and into Evolution, with Evolution remaining as the surviving corporation (the “Merger”). II—OTHER INFORMATION

~~As of the closing of the Merger, each issued and outstanding share of common stock of Evolution was converted into the right to receive 15,296,077 shares of the common stock of BBN~~ ITEM 1. Following (i) the closing of the Merger and (ii) the cancellation of 7,975,000 shares of BBN’s common stock in connection with the Merger, the former shareholders of Evolution will hold approximately 89.55% of the common stock of BBN. LEGAL PROCEEDINGS

InWe ~~connection~~are subject ~~with~~to ~~the~~various ~~Merger,~~suits onand ~~May 27,~~claims ~~2009,~~that ~~BBN~~have ~~issued~~arisen ~~an aggregate of 15,296,077 shares of BBN common stock to the stockholders of Evolution~~ in ~~exchange for their Evolution common shares at~~ the ~~ratio~~ordinary ofcourse ~~203.9477 shares~~ of ~~BBN common stock for each share of Evolution common stock~~ business. We ~~The~~do ~~issuance~~not ~~was~~believe ~~made~~that ~~pursuant~~the todisposition ~~an exemption from registration requirements under Regulation D and or Section 4(2)~~ of ~~the~~any ~~Securities Act~~ of these ~~1933,~~items aswill ~~amended.~~result Inin ~~each~~a ~~case,~~material weadverse ~~believe~~effect ~~the~~on ~~recipients~~our ~~were~~consolidated financial ~~all~~position, ~~"accredited~~results ~~investors" within the meaning~~ of ~~Rule 501(a)~~operations ofor ~~Regulation D~~cash ~~under the Securities Act of 1933~~flows.

~~Additionally,~~For additional ~~concurrent~~information ~~with~~on ~~the~~legal ~~Merger~~proceedings, ~~Evolution~~see ~~entered~~“Note ~~into~~7. aCommitments ~~Purchase Agreement with certain accredited investors for the sale of an aggregate of 20,000 shares of Series A Convertible Preferred Stock (the “Investor Shares~~and Contingencies”), ~~for~~in ~~aggregate gross proceeds equal to $225,000 (the~~ “~~Purchase~~Item 1. ~~Price~~Financial Statements”) above.

~~Sales~~ITEM 1A. ~~by Evolution~~RISK FACTORS

OnThere have ~~April 9, 2009,~~been ~~Evolution~~no ~~sold~~material ~~75,000~~changes ~~shares~~in of our ~~common~~risk ~~stock~~factors disclosed in aour ~~private~~2009 ~~placement~~Annual Report aton ~~$.01~~Form 10-K ~~per~~dated ~~share~~as toof, ~~one individual. The issuance was made pursuant to an exemption from registration requirements under Regulation D~~ and orfiled ~~Section 4(2)~~with of the ~~Securities~~SEC ~~Act of 1933~~on, November 27, ~~as amended. In each case~~2009, weand ~~believe~~our ~~the~~amended ~~recipients~~Annual ~~were~~Report ~~all~~on ~~"accredited~~Form ~~investors"~~10-K/A ~~within~~dated ~~the meaning~~ as of, ~~Rule 501(a)~~and offiled ~~Regulation D~~with ~~under~~ the ~~Securities~~SEC ~~Act~~on ofApril ~~1933~~20, 2010.

OnFor ~~July 31, 2009, we entered into~~ a discussion ~~Securities~~of ~~Purchase~~these ~~Agreement~~risk ~~with certain accredited investors pursuant to which we sold $215~~factors,~~000~~ ~~aggregate~~see ~~principal~~“Item 1A. ~~amount~~Risk ofFactors” in ~~senior~~our ~~secured~~2009 ~~notes~~Annual ~~due~~Report ~~November~~on Form ~~30,~~10-K ~~2009~~ and/or ~~five-year~~Form ~~warrants to purchase 1,000,000 shares of common stock at an exercise price of $5~~10-K/A.~~00 per share (the “Warrant”).~~

~~All sales of securities pursuant to Regulation~~ITEM ~~D were part of the same offering~~2. NoUNREGISTERED SALES ~~sales~~OF ofEQUITY ~~securities~~SECURITIES ~~were~~AND ~~made~~USE ~~more~~OF ~~than six months before the start of the Regulation D offerings or made more than six months after completion of the Regulation D offerings.~~ PROCEEDS

~~We did not, nor did any person acting on our behalf, offer or sell the securities by any form of general solicitation or general advertising.~~ Common Stock

~~Pursuant to~~ During the ~~limitations~~three onmonth ~~resale~~period ~~contained~~ended inJanuary ~~Regulation D~~31, we2010, ~~exercised reasonable care to assure that purchasers were not underwriters within~~ the ~~meaning~~Company ofconsummated ~~section 2(11) of~~ the following ~~Act~~transactions. byThe compensation ~~inquiring~~expense ofassociated ~~each~~with ~~and~~these ~~every~~restricted ~~purchaser~~stock ~~the~~awards ~~following: (1) that each purchaser~~ was ~~purchasing~~amortized over the ~~securities~~one ~~for~~year ~~the~~restricted ~~purchaser's~~stock ~~own account for investment purposes and not with a view towards distribution~~period, and ~~(2) that each purchaser had no arrangement or intention to sell~~ the ~~securities.~~appropriate ~~Further,~~expense ~~written disclosure was provided~~ charged to ~~each~~earnings ~~purchaser~~in ~~prior to~~ the ~~sale~~three ~~that~~month ~~the~~period ~~securities~~ended ~~have~~January ~~not been registered under the Act and~~31, ~~therefore, cannot be resold unless the securities are registered under the Act or unless an exemption from registration is available~~ 2010.

~~All~~11/12/2009 ~~securities~~Issued ~~sold~~75,000 ~~pursuant~~common toshares ~~Regulation D~~valued ~~contained~~at a$2.62 ~~restrictive~~per ~~legend on the~~ share ~~certificate~~in ~~stating~~payment ~~that~~for ~~the~~services ~~securities have not been registered under the Act~~ and ~~setting~~fees ~~forth or referring~~ to ~~the~~employees, ~~restrictions~~directors ~~on transferability~~ and ~~sale~~other ofthird ~~the securities~~parties.

19ITEM 3. DEFAULTS UPON SENIOR SECURITIES

~~ITEM~~On 3July 31, 2009, the Company entered into a Securities Purchase Agreement with certain accredited investors pursuant to which we sold $215,000 aggregate principal amount of senior secured notes bearing 18% interest per annum, due November 30, 2009, and five-year warrants to purchase 1,000,000 shares of common stock at an exercise price of $5.00 per share (the “Warrant”). The Notes are secured by (i) substantially all of the assets of Evolution and its subsidiaries and (ii) the pledge of Evolution of its entire equity interest in each of its subsidiaries. The Notes are guaranteed by each of Evolution’s subsidiaries. Evolution and each of its subsidiaries also entered into an account control agreement to secure the Notes. With appropriate notice, Evolution has the option to repay the Notes prior to the due date. At the date of original issuance, the Company recognized a discount on the note of $215,000 representing the fair value of the warrants at issuance. The debt discount was fully amortized at January 31 2010.

~~DEFAULTS~~On December ~~UPON~~3, ~~SENIOR~~2009, ~~SECURITIES~~the Company entered into a forbearance agreement with Harborview Master Fund, LP due to a default under the securities purchase agreement where the Company had failed to pay the principal amount and interest due on November 30, 2009. The lender has agreed to forebear exercising its rights and remedies in connection with the default provisions of the agreement. In conjunction with the forbearance agreement, the Company made the required interest payments on the principal balance to the Harborview Master Fund of $12,561 on the December 3, 2009 and $6,250 on December 30, 2009 in to satisfy the forbearance agreement. The principal balance remains outstanding at January 31, 2010.

~~None~~ITEM 4. (REMOVED AND RESERVED)

ITEM 4 5. OTHER INFORMATION

~~SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.~~Not Applicable

~~None.~~22

ITEM 5 6. EXHIBITS

~~OTHER~~31.1 Certification ~~INFORMATION~~of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

~~None~~31.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

~~ITEM~~32.1 Certification 6of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~EXHIBITS~~32.2 Certification ~~AND~~of Chief ~~REPORTS~~Financial OFOfficer ~~FORM 8~~Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-KOxley Act of 2002.

~~(a) Exhibits~~23

~~31.1 Certifications pursuant to Section 302 of Sarbanes Oxley Act of 2002~~SIGNATURES

~~31.2 Certifications pursuant~~ Pursuant to ~~Section 302~~the requirements of ~~Sarbanes~~the ~~Oxley~~Securities Exchange Act of ~~2002~~1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

32.1 Certifications pursuant to Section 906 of Sarbanes Oxley Act of 2002

Date: April 20, 2010	EVOLUTION RESOURCES, INC. (Registrant)

	By:	/s/ Dennis G. McLaughlin
		Dennis G. McLaughlin
		President and Chief Executive Officer (Principal Executive Officer)

~~32.2 Certifications pursuant to Section 906 of Sarbanes Oxley Act of 2002~~24

(b)

Reports of Form 8-K

None.

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	EVOLUTION RESOURCES, INC.
	(Registrant)
	/s/ Dennis McLaughlin
	Dennis McLaughlin
	Title: Chief Executive Officer and President
September 19, 2009
	/s/ Christopher P. Chambers
	Christopher P. Chambers
	Title: Executive Vice President and
	Principal Accounting Officer
September 19, 2009

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